Page 36 - Homeowners Manual - San Mateo County

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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