Frequently Asked Questions 

about Title Insurance

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: How are title insurance rates set?

A: Title insurance rates are set and approved by the Pennsylvania Department of Insurance.

 

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.

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.

15 years experience vector icon

Call Us Today: (814) 236-1255

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

A: Sure. First understand there different levels of coverage: Standard coverage and extended 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.

Call Us Today: (814) 236-1255

Q: Why use a title insurance company?

You cannot avoid Title insurance.  If you are buying a new home, or refinancing your current home, the lender is probably forcing you to buy Title insurance.  You are buying the insurance, not the lender.

They want you to pay to protect their interest as well as yours.

This leads to two questions:

  1. Can you save money by knowing a few basics?
  2. Can you choose your own Title agent to write the policy and close the deal for you?

The answer to both of these questions is: YES.

Let’s look at Question 2, first.  You are spending a significant sum of money on the home, and you are paying considerable fees to the bank.  Using your own Title agent costs no more than the lender or real estate agent’s “referral.”  You are paying the same amount of money, but you are in control of the closing.  Your title agent is on your side of the closing table – working for you.

Title insurance companies are in 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 companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders and others who have an interest in real estate transfer.

Title companies routinely issue two types of policies - "owner's," which covers you, the homebuyer; and "lender's," which covers the bank, savings and loan or other lending institution over the life of the loan. Both are issued at the time of purchase for a modest, one-time premium.

Before issuing a policy, however, the title company performs an extensive search of relevant public records to determine if anyone other than you has an interest in the property. Once a title policy is issued, if for some reason any claim which is covered under your title policy is ever filed against your property, the title company will pay the legal fees involved in defense of your rights, as well as any covered loss arising from valid claim.

 

Q: Why is title insurance is needed when refinancing a mortgage loan?

Why do you need to buy title insurance again even though you purchased a policy when you first bought your home and there is no change in ownership? It's because a separate policy is needed by the lender insuring the validity of your mortgage when it is made.

For as long as you own the property your mortgage is valid, but it doesn't insure the new mortgage created when you refinance, and it doesn't provide protection against events that may have transpired between the time you purchase the property and when it is refinanced.

For example, you may have taken out a second mortgage on the home that could threaten the priority of the new lender's mortgage. Or, there could be legal judgements against you or a mechanic's lien against the property by a supplier who wasn't paid for home improvements.

Lenders also insist on a new title policy because many mortgages are packaged as securities and sold to investors in the secondary mortgage market. Title insurance is the only practical way to provide the assurance investors demand and to ensure that the mortgages backing these securities are valid and enforceable.

Call Us Today: (814) 236-1255

Contact Us

Ciamacco logo_edited-2

 

Jackie Ciamacco, Title Agent
PHONE: (814) 236-1255
FAX: (814) 236-7584

Ciamaccosettlementservices@yahoo.com

Call Us Today: (814) 236-1255

Expectations and success - the idea that Expectations helps to achieve success and happiness in business, work and life symbolized by English word Expectations and a newton cradle, 3d illustration