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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.

The Title Search Process In New York

Attorney Marc Rovner serves as the director of business development and general counsel for the title insurance firm of Beta Abstract LLC, which operates near East Rockaway, New York. In this role, Marc Rovner oversees attorneys at offices in six locations throughout New York, New Jersey, Florida and Connecticut soon!


BETA Abstract provides all types of title-related services, such as title insurance. Insurance is essential to protect property buyers against any issues not discovered in a title search. Title searches are performed before a real estate transfer is finalized. In a search, an attorney or other professionals look through public records to determine if any problems can stop the sale of property.


Title searches can uncover problems such as unpaid liens, additional owners, and fraudulent paperwork. Prospective buyers may also discover land-use restrictions that can impact their plans for the property. Performing a title search before completing the real estate transaction allows buyers to reconsider their offer if they feel it is necessary.

Overall Handy Tips to Execute Claims Prevention in the Insurance Industry

As the director of business development at BETA Abstract, LLC, in Oceanside, attorney Marc Rovner manages and integrates business development activities for the title insurance company in five offices. He has also served as general counsel at the firm since 1998. An attorney from East Rockaway in New York, Marc Rovner has been recognized for his accomplishments in the area of claims prevention.

Claims prevention hinges on the identification of potential claims situations and subsequently preventing them. The practice optimizes operating costs and reduces critical losses; below are some pointers to robust claims prevention execution.

Having a Distinct ManagementSystem: It is important to understand the dynamics of an organization’s workforce. Identifying the management cycle from planning through supervision and review enables higher visibility for likely claims events.


Running Consistent Risk Evaluations: A combination of scientific and statistical approaches could help determine vulnerable spots. The organization can research the possible risk factors and document its findings to draw up actionable plans. Regular reviews would highlight progress and make provisions for changes in operations.

Steps of the Title Closing Process

An attorney based in East Rockaway, New York, Marc Rovner works as the director of business development for BETA Abstract, a title insurance company with offices in three states. In addition, Marc Rovner is a staff attorney at BETA Abstract and has taught a title closing course at Hofstra University.

The title closing process starts with a sales contract signed by the buyer and seller of a real estate transaction and delivered to the title closer. An escrow agent receives the escrow and opens a title order for tax information, survey documentation, maintenance fees, and other documents.

The title closer then conducts a search of the public records, including deeds, mortgages, wills, and liens, etc. The point of this search is to identify any potential issues that may affect the title of the property, or call into question its validity. Upon reviewing the documentation and any additional instructions, the title closer schedules the closing date. Then, the seller signs the deed and closing affidavit, and the buyer signs the new mortgage and note, completing the transaction.