217 N. Independence St., Enid, OK 73701
300 Fairview Ave., Ste. 3, Ponca City, OK 74601
Phone: 580-297-5200
Fax: 580-297-5201
Hours: M-F 9-5pm
Title Insurance
As you're examining the many expenses related to your potential home loan and purchase, you may have notice two expenses that seem overlapping at first glance-owner's title insurance (or the Owner's Policy) and the lender's title insurance (or the Lender's Policy). It makes sense to ask what these are and why they're there. Both serve as very important items for you, and your lender, both now and in the future.
When we normally think of insurance, the first thing that comes to mind is premiums–monthly out-of-pocket payments that we contribute to a shared pool of funds to cover us if something bad happens. This is, right away, how title insurance differs from other insurance you may be familiar with. You only pay for the Owner’s Policy title insurance one time, and it will protect you for the entire length of the time you own your home. The Loan Policy, also different than other insurance, is a one time premium that will provide coverage to your lender until loan is paid off.
So, that’s great, but what do title insurance policies protect us from, and why are there two of them? Why do I have the Owner’s Policy and the Loan Policy?
You may already be familiar with Homeowner’s Insurance–this is the kind of insurance that protects you in the case of a physical disaster: a fire or a terrible storm and so on. Similarly, the Owner’s Policy protects you from a legal disaster–most specifically, other people or institutions laying claim to your property down the line. If the person who sold you the home originally promised the property to a relative in a will, or if they had liens on the home from construction and improvements, there may be someone out there with a valid claim to your home. Your title insurance policy, issued by your title insurance company, straightens this out and protects you should anyone try to claim ownership interests.
The Loan Policy, or Lender’s Policy, has a different function. It protects the lender’s interest in the property, which could be challenged by an unknown loan or heir coming out of the woodwork. Both policies ensure that the owner of record has sole ownership interest in the property and that there are no unknown liens or judgements that could cloud the property’s title. As Lender’s Policies facilitate mortgages and protect lenders, they are often a necessary component of a mortgage transaction.
Common Questions and Answers
What insurance company does Heritage Title of Oklahoma use for its policies?
What if I have a problem? Do I have to lose my property to make a claim?
No. At the mere hint of a claim adverse to your title, 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.
What is the cost of title insurance?
The cost of title insurance varies, mainly depending on the value of the property. Remember, you only pay for the coverage once, then the coverage continues for as long as you have an interest in the covered property.
What does a standard title insurance policy cover?
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Forgery and impersonation;
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Lack of competency, capacity, or legal authority of a party;
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The deed is not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner);
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Undisclosed (but recorded) prior mortgage or lien;
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Undisclosed (but recorded) easement or use restriction;
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Erroneous or inadequate legal descriptions;
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Lack of a right of access;
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Deed not properly recorded
What does an extended coverage policy of title insurance cover?
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Off-record matters, such as claims for adverse possession or prescriptive easement;
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Deed to land with buildings encroaching on land of another;
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Incorrect survey;
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Silent (off-record) liens (such as mechanics’ or estate tax liens);
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Pre-existing violations of subdivision laws, zoning ordinances or covenants and restrictions.
If my lender gets title insurance for its mortgage, why do I need a separate policy for myself?
The lender’s policy covers only the amount of the 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.