Frequently Asked Questions What is title insurance and why do I need it? What does title insurance cover? Are there really very many title claims? What are the common claims against title insurance? What are the different types of insurance policies? Who pays for the policies? What is the title search process? Who orders title insurance? How much does title insurance cost? What other services does my title company provide? What should I bring to closing?

What is title insurance and why do I need it?

In order to access your property's equity to obtain a loan or to sell or transfer it in the future, you must have clear, unencumbered legal rights of ownership. Title insurance is your policy of protection against loss resulting from a claim against the ownership of your property. Title insurance helps the parties in a real estate transaction determine their rights and interests and assure that land transfer is expeditious and secure.

What does title insurance cover?

Typically other types of insurance assume a particular risk and provide financial indemnity in the event the risk occurs. Title insurance, on the other hand, emphasizes loss prevention by eliminating risks caused by title problems arising from past events. A title insurance policy is like a pre-paid legal agreement. The title insurance company will provide legal defense for any covered claim against your property and will reimburse you financially for any losses resulting from hidden defects in your ownership rights. Whether your property is a vacant lot or a historic site, it has likely had many previous owners. When the property changes ownership or when it is used as collateral for a loan, these transactions are documented in the public records. Your title company searches the public record for any problems that prohibit your clear ownership.

Are there really very many Title claims? What are the common claims against title insurance?

1 out of every 3 title searches reveals a problem with title. In 2002 alone title insurers paid 582 million dollars in claims. Claims against your property can happen for a variety of reasons these issues may result from past events such as divorce, tax liens, or judgments. Below are some of the most common claims:

• Fraud
• Forgery
• Defective deeds
• Clerical errors in the records

What are the different types of title insurance policies? Who pays for the policies?

There are two main types of title insurance policies, owner and lenders policies.

• Owner's Policy: An owner's policy protects the owner against any loss resulting from defects on the title, including another party's claim to ownership of the property. Typically, the seller pays for this product as it insures the buyer is receiving clear title.
• Lender's Policy: A lender's policy insures that the lender on a particular piece of real estate has a valid lien on the property and protects the holder of the mortgage against loss from title defects. Typically, the borrower pays for this as it insures the lender's mortgage position.

What is the title search process?

When a buyer and seller agree on a real estate purchase transaction, a title professional then searches and examines public records to disclose the current facts relating to the ownership of that particular piece of real estate including:

• The property's current owner
• liens
• Any judgments, general taxes, utility assessments or other encumbrances against the property or its owner
• Easements and/or restrictions
• Other recorded interests

With this information, the buyer, seller, real estate agent, attorney, lender and settlement agent can work toward clearing title and removing any flaws that show. After the proper documents have been recorded, a title insurance policy is issued to the new buyer and/or their lender.

Who orders title insurance?

Typically your lender will order the policy in a refinance situation and the listing agent will typically order insurance on a purchase transaction. Although consumers may shop title insurers for the most competitive rates and choose their own title company.

How much does title insurance cost?

We charge a percentage of the purchase price, based on rates filed with the division of insurance. The cost of title insurance includes the title policy, title examination and the risk of insuring the property. Unlike other insurances, the title insurance premium is a one time charge which is paid at the closing. You may contact us for a quote.

What other services does my title company provide?

We act as a disinterested third party in providing Closing and Settlement services. We prepare calculations and documents necessary to consummate a closing. Furthermore, the disbursement of closing funds and documents to appropriate parties in connection with the issuance of the title insurance policy. We also have the opportunity of having in-house attorneys who specialize in real estate law. Arapahoe Title is able to tap into their legal analysis to offer our customers a valuable resource to aid in their transactions

What should I bring to closing?

You will be instructed as to the necessary documents needed for your specific closing, but generally these may include:

• Cashiers check for your total settlement costs, you will provided with the exact amount to bring prior to closing.
• Any paper work still required by the lender, for example, your most recent pay stub.
• Photo identification (driver's license)
• All parties who must sign such as spouse or anyone listed on the title and loan.