Advice for Managing Title Insurance

Title insurance is a practical necessity to any real estate closing. While lender's title insurance protects those who extend a mortgage to you, owner's title insurance protects your right to a newly purchased property. While it doesn't insure you against every possible situation, it does cover a majority of the more common blindsides that you may face as a homeowner.

With that said, here are some common tips and stumbling blocks when dealing with title insurance.

ProTip #1: Read the Binder

Let's be honest, title insurance paperwork isn't the most exciting thing in the world. But it doesn't hurt to review it. The title insurance binder or commitment can include valuable information, such as:

• old deed restrictions
• the home's history
• land usage restrictions
• homeowner association restrictions

While you can risk violating any of these restrictions, in some areas, individuals drive around the neighborhood to ensure there aren't any apparent violations. On a year-to-year basis, complaints range from minor inconveniences to full requests for removal of structures on another person's property.

ProTip #2: Understand the Exceptions

The title insurance packet will include a section that elaborates on what is exempt from the policy's protection.

For example, utility providers need to be able to access their respective power lines, piping, etc. For certain utilities, such as water lines, employees of these companies need to dig underground for access. If an owner has something obstructing their path, like a concrete patio, the utility providers can destroy it to get through and leave the homeowner with the full damages.

ProTip #3: Understand What is Covered

On the flipside, it's important to thoroughly understand the provisions and protections offered by your title insurance policy. In fact, these can change from state to state.

For example, New Mexico excludes property survey coverage from a basis title insurance agreement. This is done to make the premiums more affordable for the home sellers.

ProTip #4: Don't Rely on Others

Ask as many questions as humanly possible to ensure you fully comprehend your title insurance policy. If you allow others to give you their understanding, you're basically playing "the telephone game".

This isn't to say that realtors, attorneys, and title insurance companies aren't trustworthy. This is merely to advise that you seek to retain the knowledge for your own purposes.

For more information on title insurance, contact Cambridge Title Company by phone at 224.330.1886 or by email at info@cambridgetitleco.com.