Title Insurance Regulations
What Title Insurance Does Not Cover?
(1) Known title defects (that were revealed before purchase) (2) Environmental hazards (e.g. soil contamination) (3) Problems that would only be discovered by a new survey or inspection of the property (e.g. the property is smaller than originally thought) (4) Matters that are not listed in public records (e.g. unrecorded liens and encroachments) 12 (5) Zoning law violations from changes, renovations or additions to a property (6) The exercise of police powers and governmental powers
What Does STANDARD title Insurance Policy Cover?
A STANDARD policy insures primarily against defects in title which are discoverable through an examination of the public record.
What is a contract ?
A contract is an agreement between two or more people that creates an obligation. The essential elements of a contract include: • Offer • Acceptance • Consideration • Legal form or obligation
License Expiration
Expires the last day of producer's birth month; Business licenses 2 years after they are issued
What Does EXTENDED title Insurance Policy Cover?
Generally, the extended policy provides the same coverage as the standard policy, but also insures against defects, liens, encumbrances, easements, and encroachments and conflicts in boundary lines that are NOT reflected in the public records.
License expiration
Individual producer licenses are issued on a biennial basis to expire on the last day of the producer's birth month. Business entity licenses expire 2 years after they are issued.
A title insurance producer that willfully or knowingly misappropriate trust money (§ 10-121)
Is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $ 50,000 or imprisonment not exceeding 1 year or both.
How Does Title Insurance Differ From Homeowner's Insurance?
It is NOT a home warranty or home insurance policy, and will not provide compensation for: (1) Damages due to flooding, fire or sewer backup (2) General wear and tear of a home (e.g. replacing old windows, a leaky roof, or an old furnace) (3) Theft (e.g. a burglar breaks into a home and steals a television) (4) Other losses or damages due to nontitle related issues
How Is the Premium Determined And When Is It Paid?
Premiums are paid only once, at the close of escrow. There are no continuing payments of premiums like other types of insurance.
How Much Title Insurance Is Needed?
The homebuyer should insure the full purchase price of the property; the lender only requires title Insurance to cover the amount of the loan.
What Is 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). Possible title defects include: • Errors or omissions in deeds • Mistakes in examining title records • Forgery • Undisclosed heirs • Missing heirs • Liens for unpaid taxes • Liens by contractors (mechanic's lien) • Accessibility to property
Who Does Title Insurance Protect?
Title insurance protects the purchaser and their lender if someone challenges the title to the property. The title insurance policy also covers legal fees in defense of a claim against a property. An insurable interest must exist at time of loss.
Licensing Requirements
US Citizen, 18 years old, good moral character, 20 hours of pre-licensing, application fee of $54
License reinstatement
When insurer dies or is disabled, the commissioner may issue temporary license to the surviving spouse, court appointed representative, next of kin, or competent employee. An application must be submitted, and the appropriate fees must be paid. A temporary license shall expire after 15 months.
Insurer must give notice of appointment termination to the producer
Within 15 days
Change legal name, trade name, email address or fax number
Within 30 days
Change of address
Within 30 days
Commissioner will approve an appointment
Within 30 days
Insurer must inform the Commissioner of an appointment termination
Within 30 days
Insurer reports final adverse administrative action or felony conviction of a producer to an insurer
Within 30 days
Insurer updates producer registry with effective date of termination
Within 30 days
Producer responds to notice of termination
Within 30 days
Are Discounts Allowed?
• A simultaneous issue rate may be given or a discount rate when an owner's policy and lender's policy are purchased at the same time and issued from the same title commitment. This allows a borrower to pay a reduced premium on the second policy. • Title reissue rate
Who Should Purchase Title Insurance?
• An owner's policy (standard and extended) • A lender's policy or loan policy An owner's policy insures the buyer for as long as he or she owns the property. This protection is limited to the value of the property at the time of a claim.