What is title insurance?
Unlike most insurance which protects against future events, title insurance protects against things that have occurred in the past. Title insurance protects you in the event there is a claim or loss against your ownership interest to the property. The policy contains information regarding the condition of your ownership rights to a piece of property. It provides you with a peace of mind to take the risk out of acquiring property whose legal history is unknown to you. For a one time premium you can receive a policy to protect against title defects or claims against the property, and it can even protect you after the property has been sold.
Why do I need title insurance if the title has been examined for defects?
Even the most thorough title search will not uncover certain possible defects. A few examples are: mistakes in the public records, forged deeds and other documents in the chain of title, or undisclosed heirs. Don't allow something to happen that may deprive you of your right to use the property or sell it.
Why do I need a lender's and an owner's title policy?
Since both Lenders and Owners have an interest in the clear title to the property, Lenders will require a buyer to purchase a Lender's Title Insurance Policy. This policy protects the Lender, only, against possible title defects up to the maximum amount of the loan. The Owner has no coverage under this policy. In order for the Owner to be protected, they must purchase an Owner's Title Insurance Policy. Owner's title insurance will protect you against any covered loss up to the full policy amount and, depending on the type of policy you choose, can offer protection from fraud and forgery. There are two types of Owner's Policies available to the buyer when purchasing residential property as an individual - Standard Coverage and Enhanced Coverage.
Do I need a survey?
A current House Location Survey is highly recommended. A House Location Survey shows the description of record, the relationship of physical improvements to the property lines and identifies any encroachments.
Virginia Land Title Association extends a tremendous amount of appreciation to VLTA Member, Myrna Keplinger, Principal of the The Settlement Group for sharing all of the materials found under the Consumer section of this website. All materials are copyrighted under The Settlement Group and VLTA has received "reprint" permission for its use.