What Title Insurance Covers

You pay a one-time fee at closing to insure the property against the following problems:

• Forgery and impersonation
• Lack of competency, capacity, or legal authority of a party Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner)
• Undisclosed (but recorded) prior mortgage or lien
• Undisclosed (but recorded) easement or use restriction
• Erroneous or inadequate legal descriptions
• Lack of a right of access
• Deed not properly recorded
• Off-record matters, such as claims for adverse possession or prescriptive easement Deed to land with buildings encroaching on land of another Incorrect survey Silent (off-record) liens (such as mechanic’s or estate tax liens)
• Pre-existing violations of subdivision laws, zoning ordinances, or CC&Rs
• Postpolicy forgery
• Forced removal of improvements due to lack of building permit (subject to deductible)
• Postpolicy construction of improvements by a neighbor onto insured land
• Location and dimensions of insured land

As you can see, these are some heavy-duty problems that can ruin your day if they pop up unexpectedly.
For example, Jack and Carolyn bought an older home in a small town, and the tax notice described the property dimensions as 110 feet _ 140 feet. That had been the accepted dimension for 75 years and six buyers.
The new buyers decided to put up a fence, and when they measured 110 feet from the east corner, they found their lot went about 7 feet into their neighbor’s living room—A potentially messy situation. They contacted the title company that insured their sale, and they had a surveyor check out the property corners. As it turned out, the old town survey had a few problems. All the lot lines along the street had to be readjusted on the plat and new property descriptions worked up and recorded in the county recorder’s office. It turned into a severalthousand-dollar project that the title insurance covered.