Title FAQs | Mutual Title Agency Inc
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Use the FAQ below to find the answers to many of our most commonly asked questions

regarding titles. If you don't find the answers you need below, please feel free to contact

Mutual Title Agency Inc. today.

Explore our FAQ about all aspects of titles

Q: What is title insurance?

A: An insurance policy--protecting against loss should the condition of title to land be other

than as insured.

 

Q: Why do I need title insurance?

A: When you buy a home, or any property for that matter, you expect to enjoy certain

benefits from ownership.

 

For example, you expect to be able to occupy and use the property as you wish, to be free

from debts or obligations not created or agreed to by you, and to be able to freely sell or

pledge your property as security for a loan. Title insurance is designed to cover these rights

you bargain for.

 

Q: What if I have a problem? Do I have to lose my property to make a claim?

A: Not at all. At the mere hint of a claim adverse to your title, you should contact your title

insurer or the agent who issued your policy. Title insurance includes coverage for legal

expenses which may be necessary to investigate, litigate or settle an adverse claim.

 

Q: What does this cost?

A: The cost varies, depending mainly on the value of your property. The important thing to

remember is that you only pay once, then the coverage continues in effect for so long as you

have an interest in covered property. If you should die, the coverage automatically continues

for the benefit of your heirs.

 

If you sell your property, giving warranties of title to your buyer, your coverage continues.

Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from

you, your coverage continues to protect your security interest in the property.

 

Q: If my lender gets title insurance for its mortgage, why do I need a separate policy

for myself?

A: The lender's policy covers only the amount of its loan, which is usually not the full

property value. In the event of an adverse claim, the lender would ordinarily not be

concerned unless its loan became non-performing and the claim threatened the lender's

ability to foreclose and recover its principal and interest.

 

And, in the event of a claim, there is no provision for payment of legal expenses for an

uninsured party. When a loan policy is being issued, the small additional expense of an

owner's policy is a bargain.

 

Q: Can you be a little more specific about the types of claims, or risks, covered by title

insurance?

A: Sure. First understand there are basically three different levels of coverage: Standard

coverage, extended coverage, and our most comprehensive "ENHANCED Policy" coverage.

 

Standard coverage handles such risks as:

  • Forgery and impersonation;

  • Lack of competency, capacity or legal authority of a party;

  • Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or

  • business partner);

  • Undisclosed (but recorded) prior mortgage or lien;

  • Undisclosed (but recorded) easement or use restriction;

  • Erroneous or inadequate legal descriptions;

  • Lack of a right of access; and

  • Deed not properly recorded.

 

An extended coverage policy may be requested to protect against such additional defects as:

  • Off-record matters, such as claims for adverse possession or prescriptive easement;

  • Deed to land with buildings encroaching on land of another;

  • Incorrect survey;

  • Silent (off-record) liens (such as mechanics' or estate tax liens); and

  • Pre-existing violations of subdivision laws, zoning ordinances or CC&R's.

 

Subject to availability in your locale, the Enhanced covers all of the risks listed above, plus:

  • Post-policy forgery;

  • Forced removal of improvements due to lack of building permit (subject to deductible);

  • Post-policy construction of improvements by a neighbor onto insured land; and

  • Location and dimensions of insured land (survey not required).

 

As with any insurance contract, the insuring provisions express the coverage afforded by the

title insurance policy and there are exceptions, exclusions and conditions to coverage that

limit or narrow the coverage afforded by the policy. Also, some coverage may not be

available in a particular area or transaction due to legal, regulatory or underwriting

considerations.

Q&A about title insurance

Find answers to your frequently asked questions.

 

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