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transactionWhat You Pay For And What You Get

Your purchase of a title insurance policy is required by your lending institution. Today’s nationwide mortgage practices have made title insurance a necessary part of the residential closing and escrow process in most cases in Ohio.

Basically there are two types of title insurance policies: one to protect the Lender and one to protect the owner of the home. You are required to provide a policy that protects the lender; you are encouraged to purchase an additional policy to protect yourself.

What do the policies cover?
The lender’s policy insures the lender that it has a valid first mortgage on your property.

The owner’s policy insures you that you have good title to your own property.

If it is later found that there is “something wrong” with your title, the lender is protected under its insurance policy. If you have not purchased a title insurance policy of your own, you will have no protection and you may sustain a serious loss.

What do we mean by “something wrong”?
“Something wrong” is usually taken to mean “title defects”. The examination of a land title and the real estate closing are complicated functions. Unfortunately problems may exist, and honest human error is always a possibility. These problems can be “title defects”. When you buy a house you get more than a building. You get title to a piece of Mother Earth- a piece that others have owned before you. You want to know if that title is subject to anything, such as building restrictions or drainage easements. The owner’s title insurance policy is designed for that purpose.

What will it cost me?
If you do buy an Owner’s Policy, the Lender’s Policy (which you must buy), which normally would cost $4.00 per $1,000.00 (for the first $100,000.00) of the mortgage loan, will cost only an additional $100.00. (simultaneous issue of loan policy). This premium is paid only once – at closing – and the Owner’s Policy will protect your investment indefinitely.

You have up to thirty (30) days after your closing to decide whether or not you want to have Owner’s Title Insurance Coverage. You should seek independent advice if you are undecided.

The premiums for title insurance policies are enforced by the State of Ohio Department of Insurance and are competitive with all title insurance companies statewide.

* Endorsement may require additional premiums.
Taken from Ohio Bar’s 1998 Pamphlet, “What is title Insurance”.