What is title and title insurance?

Title to a property is the proof that an owner is in lawful possession of that property.

Title insurance protects real estate owners and lenders against any future loss or claims they might experience due to past issues such as liens, encumbrances or defects in the title to the property.

Why do I need title insurance and what does it cover?

Obtaining title insurance is the smartest and most imperative decision you will make as a property owner. Purchasers and lenders need title insurance in order to be insured against various possible, unforeseeable title defects. The buyer, seller, and lender all benefit from full protection of the issuance of title insurance.

Title insurance protects against claims from defects such as another person claiming ownership interest, incorrect recorded documents, fraud, forgery, liens, encroachments, easements and other items that are detailed in the insurance policy.

What is the cost of obtaining title insurance?

By mandated Pennsylvania state law, the owner’s and lender’s title insurance premium is based on a set title insurance rate manual, permitted by the Pennsylvania Insurance Department. The amount of your title insurance premium is contingent on the purchase price (sale rate) or loan amount (non-sale rate).

Unlike other forms of insurance, the title insurance premium you pay at settlement is a one-time premium paid as long as you or your heirs own the property. There are no annual or recurring payments to keep your Owner’s Title Insurance Policy in effect.

What is closing of escrow and what does a title company do?

Escrow is the process in which the funds of a transaction, such as a purchase or refinance of a property, are held by a third party, often the title insurance company, pending the completion of the transaction.

It is the responsibility and significance of the title company and/or settlement agent that you receive clear title to the property when you purchase real estate. In order to do so, you will be informed of any existing rights or claims that may, in the future, threaten your title and possession to the property. Title insurance provides you with protection you need.