All About Title Insurance

What does title insurance cover?

Title Insurance covers problems arising from unpaid taxes, fraudulent or forged documents, incorrectly recorded documents, improper liens, undisclosed claims from an heir of a previous owner, and even undisclosed easements or past violations of covenants by previous owners.

How does the title company find out what, if any, defects are on title?

In order to determine what is on title, the title company does an exhaustive search of the public records for the documents associated with the property. They then determine if there are any rights or claims that may have an impact on title such as previous mortgages, unpaid taxes, recording defects, judgments, encumbrances etc. Once reported, the seller and the title company resolve any issues prior to closing to give you piece of mind your property is free and clear, aside from any new financing you may be obtaining.

What types of title policies are there?

Typically there are 2 types of title policies; the Owners Policy and the Lenders Policy. The Owners Policy in Colorado is typically paid for by the seller. This policy insures the owner from any defects from previous owners. If the buyer is obtaining a loan the lender will also require a Lenders Policy, which is the second type of policy. This policy protects the lender’s interest in the property and is paid for by the buyer (ie. the person obtaining the loan).

Who chooses the title company?

Typically the seller chooses the title company. In addition, whoever chooses the title company also pays for the Owners Policy (see above). Many title companies are underwritten by the same insurance companies and therefore the pricing of title policies across different title companies in Colorado are usually quite close.

If you have any questions or concerns about your title policy, please reach out to your Thrive Advisor anytime.

For a deeper dive on title insurance, click here to access Colorado’s resources and FAQ’s.