What Does Title Insurance Cover?

Real estate experts encourage all property buyers to purchase title insurance to protect their investments. During most real estate transactions, a title company or an attorney conducts a title search to ensure that there are no errors or debts on the property. However, even after a thorough title search, mistakes or errors can result in serious financial losses for new property owners. Title insurance covers claims that arise after the sales transaction has closed. These claims may come from heirs or creditors who have liens against the property. Other legal issues may result from filing errors.

Title insurance for the property owner and mortgage lender costs a maximum of 1 percent of the purchase price. After the upfront payment, policyholders are covered for costs related to any of the following scenarios. A property can be used as collateral for a loan. In this situation, the lender places a lien on the property. If the original loan holder does not pay off the loan, the balance is taken from the value of the property.


Contractors use liens to obtain payment for renovations or construction work. A failure to pay property taxes may also result in a lien. These liens are connected to the title and are transferred to the new owner when the property is sold. While liens are usually noted in public records, there are times when a lien may not be discovered until after the sales transaction is complete.


Title insurance also protects policyholders from claims on the property made by previously unknown heirs. By law, all heirs have the power to veto the sale of a property. If the seller did not notify the heirs before the sale, they may have the authority to reclaim the property. However, title insurance covers any legal expenses related to the claim fight and financial judgments to the heirs. Errors on deeds or titles can cause difficulties for property buyers. Mistakes may appear on these legal documents due to human error, forgery, or missing papers. Since banks use this information to calculate mortgage amounts, inaccuracies can severely delay the buying process. A common issue is a gap in the chain of title or the historical record of all previous homeowners. This can increase the chance of a property owner encountering unforeseen obstacles or errors.


Additionally, criminals can forge ownership documents for properties they do not own and sell them to unsuspecting buyers. Criminals also may use the property owner’s identity to fraudulently take out loans against the property. In either case, title insurance can protect policyholders from related financial losses. While title insurance covers a broad range of deed- and title-related problems, some conditions are excluded from coverage. For example, financial losses due to regulations that restrict the use of a property, such as zoning laws, are not covered.
Title insurance policies also do not cover legal problems caused by the policyholder. In addition, damage from fire, natural disasters, or accidents is not covered. For these reasons, property buyers are advised to purchase other forms of home insurance alongside title insurance.

A Look at the Martindale-Hubbell Marketing Network

Marc Rovner, an accomplished attorney and graduate of the Boston University School of Law, is a lifelong New York Giants fan and season ticket holder. A resident of East Rockaway, Marc Rovner works professionally as a Continuing Legal Education instructor, in addition to service as general counsel and director of business development at BETA Abstract in Oceanside.

Martindale martketing network

Over the course of his career, Mr. Rovner has claimed a number of awards through the Martindale-Hubbell legal network. These include the 2017 and 2018 Client Champion Silver Distinction Award in addition to other awards in 2015 and 2016 from other online legal resources within the Martindale-Hubbell network, which attracts more than 23 million visitors on a monthly basis. The network includes the following resources:

*Martindale-Hubbell – This resource has connected clients with attorneys since its founding in 1868 and has built more than 40,000 attorney websites to date.

*Lawyers.Com – A brand that helps clients identify top-quality attorneys via online profiles of individual lawyers and law firms. In addition, Lawyers.com provides a wide range of educational resources and content.

*Avvo – Another resource dedicated to connecting clients with attorneys, Avvo provides an attorney directory on top of profiles, reviews, ratings, an online forum, and other resources.

*Martindale-Nolo – A lead-generation service that draws on an extensive legal marketing network that includes DisabilitySecrets.com, Nolo.com, and AllLaw.com, among others.

*Martindale-Ngage – A support-focused resource that provides around-the-clock chat service for clients visiting law firms’ websites or Lawyer.com attorney profiles.