Title Insurance FAQ

What is a title?
Ownership of real property to the exclusion of anyone else's right to claim the property. Evidence of title is recorded in a deed and held in a county recorder's office. The terms "title" and "deed" often are used interchangeably; strictly speaking, the deed is the document and the title is the ownership right that is recorded in the deed.

What is title insurance?
A policy that guarantees that an owner properly has title to a property and can legally transfer title to someone else. Should a problem arise, the title insurer pays any legal damages. Title insurance protects against loss due to hidden title defects, fraud, forgery, incompetence or missing heirs.

Why do I need title insurance?
Before a lender will issue a mortgage, there will need to be evidence that the buyers will receive good title to the property. A title insurance policy purchase will be required to guarantee the lender's interest in the property. Even if you are paying all cash for a property, it is wise to obtain a title insurance policy to protect yourself. Because land is permanent and can have many owners over the years, various rights in land may have been acquired by others (such as mineral, air, or utility rights) by the time you come into possession of it, even if the land has never before been built upon. So, in order to transfer a clear title to a piece of land, it is first necessary to determine whether any rights are outstanding.

What is a title search?
A check of public records to make sure that the owner of real property has the right to transfer ownership. A title search is designed to spot gaps in the chain of title, liens, problems with the legal description of the property, judgments against the owner. The search also reveals tax information, rights of ways for power companies, and any unsatisfied liens or claims again the property.

What is the Title Company's roll?
The title company checks a property's title for liens and other obstacles to sale, fixes any clouds to title, supervises the closing transaction, and makes sure that money transfers in a purchase are processed correctly. At Peninsula Title, you can expect us to complete the paperwork accurately and on time, issue title commitments and insurance policies promptly, and conduct settlements at the convenience of the parties.

More information on title searches:
There are two kinds of policies -- one for lenders and one for owners.
A real estate contract should include a clause requiring sellers to provide you with a good title to the property at closing.
The premium is paid only once, at settlement, title insurance continuously protects the owner or his/her heirs as long as they own the property. There is no annual renewal payment need to keep policy in force. It is not transferable from one party to another.