Coastline Title is an authorized agent for Stewart Title Guaranty Company and Mr. Powell is an authorized agent for Attorneys Title Insurance Fund, Inc.

WHAT YOU SHOULD KNOW ABOUT TITLE INSURANCE

What is Title Insurance and why do you need it?

Title Insurance is simply a contract between the insured and a title company. Under the contract the insured agrees to pay a premium and the title company agrees to provide financial guaranty to the buyers that they are the sole parties in title, free and clear of any and all encumbrances of record and to the lender, that all of the conditions of the loan to buyer are satisfied and the lender's mortgage has been perfected as an appropriate lien against the buyer's property.

Before issuing a title policy the title company performs a search of county real property records. This search is done by using the title companys abstract plant which maintains references to deeds, mortgage liens, deaths, divorces, etc. that may affect the property.

What are the types of Title Insurance Policies?

Generally, there are three types of title insurance policies:

1.   Owners Title Policy: protects the owner of the property while he or she is the owner and after the property is sold;

2.   Mortgagee Title Policy: protects the lender from loss if there is a determination that its lien is not valid or is inferior to another lien that is not shown as an exception to coverage on the policy; and

3.   Leasehold Title Policy: protects against losses a tenant may suffer in the event a landlord does not own the property.

What is the amount of coverage?

1.    Owners Title Policy: policy will be issued in an amount equal to the current outstanding loan balance;

2.    Mortgagee Title Policy: policy will be issued in an amount equal to the current outstanding loan balance; and

3.    Leasehold Title Policy: the policy will be issued in an amount equal to one of the following:

a.    the total amount of rentals payable under the lease contract, or b.    the value of the land and any existing improvements, or
c.    the value of the land and any existing improvements and the costs of improvements immediately contemplated to be built on the property.

Can a defective title be cured?

Depending on the nature of the title defects, they may be corrected with the assistance of a real estate attorney. Correction methods include affidavits, correction deeds and other documents. Court action may be necessary. Sometimes the commitment for the title insurance will list what items or actions would be necessary to remove the matter in question as an exception to coverage.

The title company does not cure bad titles or write legal documents. Documents required by the title company are not meant to cure a title defect; they are required to satisfy the title company that the property is insurable.

How is title insurance paid?