The Two Types of Title Insurance and What Homebuyers Should Know

Your home. It’s where you raise your family, share your dreams, welcome your friends, and create your fondest memories.

It’s also one of your biggest investments. When you purchased your home, your title company conducted a detailed search into the history of the property in order to issue clear title to your home. But even the most careful title search might not uncover hidden title defects that could arise in the future, such as improper execution of documents, forgeries or fraud, undisclosed or missing heirs or unpaid judgments and liens. Without title insurance, you could be purchasing a property and becoming responsible for actions of the residents who may have occupied it before you.

Types of Title Insurance

There are two types of title insurance: An Owner’s Policy protects you and your property – your equity. It provides assurance that your title company will stand behind you if a covered title problem arises after you buy a home. That’s why it’s important to work with a title company with a strong foundation and commitment to the community, such as Southern Title. With an Owner’s Policy, your title company will protect you from actual monetary loss or damage up to the face amount of the policy, plus it will cover the legal cost of defending your title in litigation for covered matters under the policy.

Typically a lender will require a Loan Policy, which will protect the lender for the amount of the loan. If you only have a Loan Policy, only your lender is covered if a problem materializes with your title.

Unlike most insurance policies, title insurance is a one-time-only premium that continues to provide coverage for as long as your or your heirs own the property. Think of it as a way to protect your legacy for future generations.

Whether you have been in your home for 5 years or 30, it’s a good idea to take a look at your Owner’s Title Insurance Policy on an annual basis and compare your home’s value with the face value of the policy (the price you paid when you bought it). If your home has significantly increased in value, you might consider contacting Southern Title to increase the limits of your policy. That way, if you have a claim in the future, that Owner’s Title Insurance Policy, will provide protection for the true value of your home, not what you paid for it years ago.

You’ve been in your home for 15 years. What could possibly come up?

• Sometimes forged or fabricated documents that affect property ownership are filed in the public records, obscuring the rightful ownership to the property. Once these forgeries come to light, your rights to your home may be in jeopardy.
• At the time of purchase, you may not know that a third party holds a claim to all or part of your property – due to a prior owner’s mortgage, unpaid judgment or lien, including a mechanic’s lien on new construction. Or there could be restrictions or covenants limiting your use of the property.

You get the picture. Whether you are buying the home of your dreams, moving on to your next phase in life, or refinancing to take advantage of lower interest rates, safeguarding your investment is your top priority – and ours, too.

And so is protecting your identity. Cyber crimes, wire fraud and identity theft are more prevalent and scammers actively seek information online from buyers and sellers during the real estate transaction process. That’s why Southern Title invested in the technology and resources to successfully complete a comprehensive third party data security assessment demonstrating its adherence to ALTA Best Practices Pillar 3 and applicable Gramm-Leach-Bliley Act (GLBA) and Federal Trade Commission (FTC) requirements.

To further protect you and your investment, Southern Title provides one year of free identity theft protection to all our buyers and sellers.

Your home is yours. An Owner’s Title Insurance Policy from Southern Title helps keep it that way. With 9 offices in Florida, Southern Title is poised to serve you whether you are buying, selling, refinancing, or even increasing your Owner’s Policy protection. For more information, consult Southern Title’s website at www.stitle.com.

Lisa Blythe is the Director of Marketing at Southern Title in Daytona Beach, FL. She is also a Life Director with the Volusia Building Industry Association (VBIA), and was Affiliate of the Year in 2008. She is an active member of the Daytona Beach Area Association of Realtor and was named Business Partner of the Year in 2012. Lisa handles marketing and publicity for the Women’s Council of Realtors, is active in the local government and government affairs committes with the Daytona Regional & Port Orange/South Daytona Chambers of Commerce, and is Secretary of the Port Orange/South Daytona Rotary Club.