Title insurance will not cover you for unpaid property taxes which are not known at the time of closing. It will also not cover unpaid municipal or IRS liens, or unpaid gas, electric or water bills.

Who typically pays the title expenses?

In the standard purchase contract for a home, however, the seller pays for the cost of the owner’s title insurance policy issued to the buyer, and the buyer pays for the cost of their lender’s title insurance policy issued to the buyer’s mortgage lender.

What is the main purpose of title insurance?

Title insurance is a contractual obligation that protects against losses that occur when title to a property is not free and clear of defects (e.g. liens, encumbrances and defects that were unknown when the title policy was issued). Title insurance also guarantees loan priority.

What kind of title insurance do I need for my home?

The title policy required by a lender covers only the lender’s interest in a property. The homeowner’s policy, purchased at closing, provides coverage for the homeowner. If your home’s title is challenged, based on a situation covered in the policy, the title insurer will either perfect (establish a valid title) or pay for defending against …

What are the different types of title insurance coverage?

Enhanced access coverage protects actual pedestrian and vehicular access to the property. This protects against someone building a structure (excluding boundary walls and fences) that encroaches on the insured property. This coverage protects against supplemental taxes for prior construction, change of use or ownership.

How does address coverage work for title insurance?

Address coverage insures that the home has the same address as the property insured in the policy. This type of coverage protects against loss of title if someone attempts to enforce an existing restrictive covenant due to a violation that occurred before the policy date.

What’s the deductible on a title insurance policy?

Read on for a description of some of the additional coverages you’ll receive when you upgrade to a Homeowner’s policy. Covers up to $25,000 after a deductible equal to the lesser of 1% of the policy amount or $5,000.