The Owners Title Insurance covers you (the owner) for any claims made against your ownership of the property. It insures that the person who SOLD you the property was the rightful owner and that if any fraud had occurred in the past, or errors were made during the title search, you are protected. All kinds of errors can happen and this policy protects YOUR investment in the property. It also covers the cost of legal fees you may have in defending your ownership of the property. This means that even if someone files a totally frivolous legal action against your ownership rights, the Owners policy will pay the legal fees required to prove the claim is without merit. The cost of this policy is a based on the price of the property and in Sonoma County, this is normally paid by Buyer at close of escrow. This insurance is a one-time cost, not a recurring monthly cost. Remember that the Owners Title Policy also protects you when you go to SELL the property. If the next buyer’s title company discovers a problem with the title that existed before you purchased the property, your Owners Policy will cover the cost to resolve the problem. According to the California Land Title Association, 26% of all title searches discover an issue that gets resolved before a new policy is issued. That is more than one in four! We like title insurance. You can find out more about title insurance companies in Sonoma County by going to the California Land Title Association website.
The second type of title insurance is the Lenders Title Insurance. This has many of the same protections as the Owners Policy, except that it protects the lender. This policy is required by most lenders. The cost of this policy is a based on the loan amount and in Sonoma County, is normally paid by the Buyer at close of escrow. As the seller of a property, if you provide any seller-financing to the new buyer, YOU will want a Lender’s Title Policy to protect your investment.
While you are at the escrow office for the document signing, remember to check the Statement of Charges to be sure that;
ALSO, Check the Lenders Title Insurance and be sure that the policy cost was determined from the correct loan amount.