Title Insurance

Title Insurance in California ## Purpose and Nature of Title Insurance Title insurance is fundamentally different from property insurance or health insurance: it protects against past events (defects in title that existed before the policy date) rather than future risks. A single premium is paid at closing, and the policy remains in effect for as long as the insured holds an interest in the property (for owner's policies) or until the loan is repaid (for lender's policies). Title defects can arise from many sources: errors or omissions in public records, forged documents in the chain of title, undisclosed heirs, improperly executed deeds, errors in legal descriptions, undisclosed prior encumbrances, fraud, and survey errors. Without title insurance, a buyer has no protection if a defect surfaces years after closing. --- ## The Two Primary Policy Types ### CLTA (Standard Coverage) Policy The California Land Title Association standard policy is the most common owner's policy in California residential transactions. Covers: - Defects appearing in the public record (recorded deeds, liens, encumbrances) - Forgery, fraud, or incapacity in the chain of title - Undisclosed marital rights - Mechanic's liens (under certain conditions) - Access to a public road (basic) Does NOT cover: - Encroachments, boundary disputes, or survey matters - Rights of parties actually in possession of the property - Unrecorded easements not visible in the records - Matters that a physical inspection would disclose ### ALTA (Extended Coverage) Policy The American Land Title Association extended coverage policy covers all CLTA protections PLUS: - Encroachments and boundary issues (what a survey would reveal) - Rights of parties in actual possession (undisclosed tenants, adverse possessors) - Unrecorded easements and access rights - Any…