What is Title Insurance?

What 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 party 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 which will protect you.

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 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 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 that your now own a clear title and you want to know if that tide 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?

A policy in Ohio will cost 5.75% per $1000 of the sales price. For exact figures please contact your title company.