Page 38 - Homeowners Manual - Arizona
P. 38

FREQUENTLY ASKED QUESTIONS ABOUT TITLE INSURANCE


        Q� What does title insurance insure?
        A� Title insurance offers protection against claims resulting from various defects (as set out in the policy) which
        may exist in the title to a specific parcel of real property effective on the issue date of the policy� For example,
        a person might claim to have a deed or lease giving them ownership or the right to possess your property�
        Another person could claim to hold an easement giving them a right of access across your land� Yet another
        person may claim that they have a lien on your property securing the repayment of a debt� That property may be
        an empty lot or it may hold a 50-story office tower� Title companies work with all types of real property�

        Q� How much can I expect to pay for title insurance?
        A� This point is often misunderstood� Although the title company or escrow office usually serves as a meeting
        ground for closing the sale, only a small percentage of total closing fees are actually for title insurance
        protection� Your title insurance premium may actually amount to less than 1% of the purchase price of your
        home and less than 10% of your total closing costs� The title policy is good for as long as you and your heirs own
        the property with the payment of only one premium�

        Q� Why are separate owner’s and lender’s title insurance policies issued?
        A� Both you and your lender will want the security offered by title insurance� As the owner, you will want
        assurances that the home is yours and that you are protected against certain title defects� Your lender will likely
        want title insurance in order to protect its loan security interest, and may even be required to have a lender’s
        policy in place in order to sell the loan to secondary market investors�


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