What Is Title Insurance?
A policy of title insurance is issued in real estate transactions in Colorado. Unlike casualty insurance which protects future acts, title insurance protects against loss or damage resulting from defects that may have occurred in the past. The process begins with the title insurance company providing a search and examination of the public records to determine and disclose the current facts relating to the ownership of a piece of real estate, such as:
1. Who currently owns the property;
2. Any liens or encumbrances against the property or its owner;
3. Easements and/or restrictions; and
4. Other recorded interests.
With this information the Buyer, Seller, real estate agent, attorney, lender and settlement agent can work toward closing the transaction. When the proper documents to transfer have been recorded a title insurance policy is issued to the new owner and/or their lender.
The charge for a title insurance policy is a one-time premium, paid for at the time a policy is issued. This fee includes the costs of the title search, examination, production, and risk.