What is a Title?

A title is an owner's right(s) to possess and use a property.

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What is Title Insurance?

There are two types of title insurance, Lender Title Insurance and Owners Title Insurance.

Lenders Title Insurance - this is typically required by the lender in the form of a Loan Policy, which protects the lender's interest in the property, should a problem with the title arise.  The policy amount decreases commensurate with the loan.

Owner's Title Insurance is usually issued in the amount of the real estate purchase.  It is purchased at the time of closing for a one-off fee and lasts for as long as you or your heirs have an interest in the property.  Owner's Title Insurance fully protects the buyer should a problem arise with the title that was not uncovered during the title search.

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What is a Title Search?

The Title Company will search the public land records for matters relating to the specific title.  That search may go back as far as 50 years.  Title problems such as deeds, wills and trusts that contain incorrect information, outstanding judgments or tax liens against the property or easements are identified.  The Title Company fixes these problems and issues the Title Insurance.

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Why do I need Title Insurance?

In Pennsylvania, title insurance is not legally required for purchasing real estate.  However, almost all lenders will require that you purchase a title policy.

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How am I protected?

A standard title policy insures the owner and the lender from any financial loss resulting from the following:

1. title being vested in someone other then the seller
2. any defect in, lien against or encumbrance on the title
3. unmarketability of the title
4. lack of pedestrian access to and from the land

This coverage does not cover the five standard exclusions, or any specific encumbrances or easements which are recorded against the property. The five standard exclusions are as follows:

1. Any title claim known to the buyer but not yet recorded as of the date of the policy:
2. Any title claim which was self-imposed or created by the buyer
3. Any loss resulting from zoning violations or subsequent zoning changes
4. any subsequent loss resulting from state action (condemnation or eminent domain proceedings)
5. Any condition which would have been disclosed by an ALTA as-built survey

Exceptions from coverage will also include matters which are recorded against the property, including utility easements, roadways, railroad rights, restrictive covenants and if applicable homeowner use restrictions. Also excepted from coverage is environmental contamination of the property and future property tax increases.

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How much does it cost?

In Pennsylvania, title insurance rates are set by the state.  The amount of title insurance is based on the greater of the purchase price or the loan amount.  See our Rate Calculator to determine how much it will cost you.

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I'm refinancing, why do I need new title insurance?

If it has been no more than 10 years since you obtained the previous policy, ask for a "reissue rate" to receive a discount. You will not need to purchase new Owner's title insurance when refinancing. Owner's title insurance is purchased for a one-time fee at closing and lasts as long as you or your heirs have an interest in the property.

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I'm buying a newly built home, do I need title insurance?

Construction of a new home raises special title problems for the lender and owner. You may think you are the first owner when constructing a home on a purchased lot. However, there were most likely many prior owners of the unimproved land. A title search will uncover any existing liens and a survey will determine the boundaries of the property being purchased. In addition, builders routinely fail to pay subcontractors and suppliers. This could result in the subcontractor or supplier placing a lien on your property. Again, lenders want to be sure the property has clear title, and they are insuring the correct property. Purchasing owner's title insurance will protect you against these potential problems and pay for any legal fees involved in defending a claim.

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