Virginia Title Insurance, Title Company Chesterfield, Richmond VA, Escrow

Unmarketability of the title

Loss due to unknown liens or encumbrances


Why do you need Title Insurance?: To protect you against losses from undiscovered defects in existence when the policy is issued.

Will the Title Insurance Company provide defense for claims?: Yes. The title insurance company will defend at its expense all litigation against the insured regarding a title defect covered in the policy, whether or not the claim proves valid. The insured transfers all rights of subrogation to the title insurance company, and gives the company permission to use the name of the insured in all actions connected to defense or recovery.

What is the Owner's Policy?: The owner's title insurance policy applies to the owner of real property, whether it be an individual or corporation. The policy is interminable and can be passed on to heirs or corporate successors.

What are the Mortgage Policies?: Mortgage title insurance policies, also known as lender or loan policies, insure in addition to other matters, that the person receiving the loan from the lender has title to the real estate encumbered as security and that the deed of trust or mortgage is a valid lien on the real estate. The liability in a mortgage policy, except for litigation expenses, decreases as the mortgage is paid, and terminates upon final payment.

Myth:: Mortgage title insurance policies, also known as lender or loan policies, insure in addition to other matters, that the person receiving the loan from the lender has title to the real estate encumbered as security and that the deed of trust or mortgage is a valid lien on the real estate. The liability in a mortgage policy, except for litigation expenses, decreases as the mortgage is paid, and terminates upon final payment.
Fact:: The title industry is actually structured for low claims loss ratios. Title insurance is a risk-elimination industry. In a perfect world, the title examiner would report, and the closer would clear up or eliminate all potential title issues (judgments, liens, etc.), prior to closing so that the purchaser obtains a good title. However, even the most competent title examiner cannot discover more than 20 types of hidden title defects that can adversely affect property title, including missing heirs, forgeries, improper parties to a deed, etc. Whenever such a challenge arises, title insurance protects the homeowner's right to that property.

Myth:: Title Insurance is expensive coverage.
Fact:: Title insurance offers homeowners low-cost protection. Assume that the one-time title premium on a particular transaction is $1,000. While that is not an insignificant figure on the HUD-1 settlement statement, it's more accurate to consider the cost of the premium over the time the property is owned. In the above example, if a purchaser lives in the property for 10 years, the one-time-only premium's true cost is only $100 a year. That inexpensive coverage offers protection of the homeowner's most valuable asset for as long as the property is owned and protection forever on any warranties given by the insured to a future purchaser.

Myth:: Few properties have title problems.
Fact:: A large percentage of real estate titles have defects. Whether these defects are unreleased prior mortgages or judgments, questionable property descriptions, or something else that can adversely affect title, many of these properties would sell only at a significant discount -- and some would not sell at all -- without the comfort of a title policy. In many instances, title insurance is the grease that keeps real estate's wheels rolling.

Myth:: Title problems are solved by writing a check.
Fact:: Title claims are contentious, emotional, and very expensive. Threats to property titles through fraud and other intentional means are on the upswing, and few homeowners can afford to pay litigation costs. Knowing that litigation fees and title coverage will be borne by the homeowner's title insurance company offers peace of mind worth every penny of the one-time-only premium.