Title insurance: often required on commercial
Loan insurance: depends on the down payment
Fire insurance: always required
Title insurance
It covers title defects found after the sale. It sometimes replaces the location certificate.
Loan insurance
It protects the lender if value falls short of the debt. The premium is added to the loan.
What is required
- Title insurance: often required on commercial
- Loan insurance: depends on the down payment
- Fire insurance: always required
What title insurance covers
- An encroachment found after closing
- An easement not declared in the contract
- A defect in the chain of title
- Work done without permits by a former owner
What it does not cover
It does not replace an inspection. It covers no construction defect.
The cost
The premium is paid once, at signing. It lasts as long as you own the property.
When it replaces the certificate
A new location certificate takes weeks to produce.
Title insurance sometimes allows signing without waiting for it.
That helps in a pinch, but it does not replace a title search.
Who decides to take it
The lender sometimes requires it as a funding condition.
You can also take it on your own initiative.
Discuss it with your notary before the deed is signed.
