There are two types of title insurance policies – lender’s and owner’s title insurance. A lender’s policy is separate from what an owner would be covered by and only covers a lender’s interest in the property. If you have a mortgage, you will likely be required to carry lender’s title insurance.

An owner’s policy protects against loss due to any of the problems mentioned above. Even a “hidden hazard” can result in a claim against your ownership. Enhanced owner’s coverage includes coverage for zoning, subdivision, building permit and encroachment issues, as well as the coverage for certain post-policy matters such as theft of identity, forgery, and neighbor encroachment. Owner’s coverage provides legal defense and any liability or loss that may arise. Enhanced coverage also allows for an increase in coverage as the property value increases, up to 150% of the policy coverage.

The job of the title company, such as Lakeside Title Company, begins well before the settlement. We assemble information from many sources, including buyer’s and seller’s mortgage companies, land records and court records. We coordinate with all parties involved in the settlement. We look for any potential problems in the transactions and clear any judgments and/or liens against the parties prior to the transaction. At the settlement table, we collect and disburse funds from the transaction, transfer ownership of property and issue title insurance after settlement. The title company is also responsible for recording the Deed and Deed of Trust in land records. Additionally, we track and record the release of the seller’s mortgage.

A title search can show a number of title defects and/or liens, as well as other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against the current or prior owner, and restrictions limiting the use of the land.

The short answer is less than you think. Charges vary, but generally, the cost of title insurance (including title abstract, examination and related services) amount to about one percent or less of the cost of the property. And unlike other insurance premiums, which must be paid annually, a title insurance premium is only a one-time fee. Rates are set and regulated by the Maryland Insurance Commission. (If sellers have a current owner’s title policy, the buyers may be eligible for a re-issue rate.)

For as long as you or your heirs retain an interest in the property, and in some cases, even beyond.