Title Insurance

Frequently Asked Questions

Title insurance is a form of indemnity insurance that protects the owners and mortgage lenders against financial loss resulting from challenges or defects in the title to real estate. Prior to the transfer of ownership, a satisfactory title examination is required to issue the policy. These policies protect a policyholder against loss from some occurrence that has already happened but is not shown in the public record, such as a forged deed somewhere back in the chain of title.

Title insurance will typically cover the policyholder’s attorney and court expenses, or pay for financial loss caused by unknown defects, subject to the policy’s terms and limitations.
Title insurance is the only insurance that protects purchasers and owners against loss due to an unforeseen title defect.

Although an owner’s title insurance policy is optional at the time of settlement, RGS Title encourages consumers not to waive their right to purchase this protection. Lenders require mortgage title insurance as a condition for obtaining a loan whenever you purchase or refinance real estate. A lender’s title insurance policy protects the lending company against a financial loss or an expense incurred due to issues related to the title.

Title insurance insures loss from past events, while other types of insurance cover loss from future events. When buying real estate for the first time, we recommend purchasing an owner’s title insurance policy. Title insurance is a one-time purchase, not a recurring expense like automobile or homeowners insurance.

As part of our settlement service, RGS Title will conduct a thorough title search that results in a detailed history of the property based on recorded documents such as deeds, liens, and judgments maintained and indexed at the courthouse in the jurisdiction where the property is located. Occasionally, however, the system used by a courthouse for indexing and recording documents related to real property can be subject to flaws and inconsistencies, and the title company’s investigation may not discover them.

Typically, defects that can appear on a property’s title are a matter of public record, such as unreleased mortgage liens, medical and utility judgments, and mechanics liens. Other defects that can cause a more substantial loss of your investment and lead to higher legal fees are more dangerous and often hidden. The following examples are not common, but can occasionally occur:
  • Forged deeds, releases, wills, or other legal documents
  • Failure of spouses to join in conveyances
  • Undisclosed or missing heirs
  • Deeds from minors, undocumented immigrants, or persons of unsound mind
  • Errors in indexing public records
  • Liens for unpaid taxes, including estate, inheritance, income, or gift taxes
  • Mistakes in recording legal documents
  • Deeds from defunct companies/corporations
  • Unprobated wills
There are two types of title insurance policies available to consumers at the time of settlement:
  • Standard Policy – Based on the sales price of the home at the time of closing, and does not escalate in value with the home’s appreciation over time.
  • Enhanced Policy – Offers an escalation as the value of a home appreciates. Under an enhanced policy, the homeowner may be able to recover up to 150% of the original purchase price.