Superior Title & Escrow of Kansas City

Title Insurance

What is title insurance and why do I need it?

The answer is simple: The purchase of a home is most likely the most expensive and important purchases you will ever make. You and your mortgage lender will want to make sure that the property is indeed yours and that no individual or governmental entity has any right, lien, or claim to your property. Title insurance companies are in the business to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly and that your interests as a homebuyer are protected to the maximum degree.

Title insurance is an insurance policy or contract issued by a title insurance company. It protects the insured against a loss that may arise by reason of a defect in the ownership or interest in real property. The title policy guarantees that at the date and time the deed was recorded placing title in the name of the insured, the title was free of defects apart from those "excepted to" in the policy.

In addition, the title insurance company agrees to defend the insured in court if there is an attack on the insured's title. It will cover attorney and court expenses or pay a loss caused by a defect in the title up to the face amount of the policy subject to the terms in the policy.

What types of policies are available to me as a homeowner?

For the average property owner, there are two different types of title insurance policies that you need to be aware of:

Owner's Title Insurance Policy- The owner's policy protects the investment of the buyer or owner of the property against defects in the title.

Mortgagee' Title Insurance Policy-(also called Lender's Title Insurance Policy)- The mortgagee's policy protects the lender's mortgage interest in the property.

How does title insurance differ from other types of insurance?

Title insurance is different from other types of insurance in that it protects you, the insured, from loss that may occur from matters or defects in the past. Other types of insurance such as auto insurance, life insurance or health insurance cover you from losses that may occur in the future. Title insurance does not protect you from a defect that may originate at a later date.

What are the risks?

There are numerous problems or defects than can arise to cause an attack or loss of the title to your property. Some of these include problems not disclosed by the most careful search of the public records(title search).

Some of the risks that can cause a loss of title or an expensive lawsuit are:

How is title insurance obtained?

Its easy! As real estate contracts typically provide that the Seller will provide and pay for the Owner's Policy for the Buyer, Superior Title & Escrow will issue that policy. The cost is a one time premium and is paid for at closing. The premium is determined by the sales price of the property.

Isn't purchasing both the Owner's and Mortgagee's Policy a double payment or duplicate coverage?

No, its not a double payment or duplicate payment.

The Mortgagee's Policy protects the Buyer's lender only so long as the loan is outstanding and only in the amount of the balance of the loan at any given time. The premium for the Mortgagee's Policy is typically paid for by the Buyer.

The Owner's Policy protects the Buyer up to the face amount of the policy during the Buyer's ownership and after you have sold the property if you have warranted the property to your subsequent Buyer.

If you have any questions concerning title insurance coverage, Please call us. The above is only an introduction to title insurance. The exact terms and conditions of coverage are provided in your policy.