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What is and is not covered by title insurance

When making a real estate purchase in Illinois, a buyer receives the title that proclaims him or her the new owner and the recipient of the rights that go with ownership. If there are past errors or issues attached to that title, it could cause expensive problems for the new owner. FindLaw explains that title insurance policies often provide coverage for the costs of clearing the issues off the title.

A title search is typically done before the insurance policy is purchased, and it minimizes the risk that the insurance company takes on. This search could reveal past issues such as an incorrect name on the deed, errors in public records, or an outstanding mortgage, judgment or lien. The current owner would need to take care of these before the property could be purchased and the title transferred to the new owner. However, some problems may still crop up later, such as:

  • A prior mortgage release was forged.
  • The seller was only pretending to be the true owner of the property.
  • The property is not legally accessible.
  • The description of the property is inadequate.
  • An undisclosed heir has a claim on the property.

The American Bar Association points out that many title insurance policies have exceptions that are not covered, although some companies may offer coverage at an additional cost. These include:

  • Boundary disputes
  • Easements not included in the public records
  • Mechanic's liens that were not recorded
  • Taxes not included in the public records

After the title is transferred to the new owner, any issues associated with his or her ownership, such as a new tax lien on the property, will not be included in coverage. 

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  1. The Essig staff are courteous and helpful, and the attorneys are professional and knowledgeable. They are very efficient, with prompt turn-around times on title orders and real estate closings. I would highly recommend this office to others!

    -Donna Jones Craig Jim Maloof Realtor

  2. The Essig staff are courteous and helpful, and the attorneys are professional and knowledgeable. They are very efficient, with prompt turn-around times on title orders and real estate closings. I would highly recommend this office to others!

    -Donna Jones Craig Jim Maloof Realtor

  3. The Essig staff are courteous and helpful, and the attorneys are professional and knowledgeable. They are very efficient, with prompt turn-around times on title orders and real estate closings. I would highly recommend this office to others!

    -Donna Jones Craig Jim Maloof Realtor

  4. The Essig staff are courteous and helpful, and the attorneys are professional and knowledgeable. They are very efficient, with prompt turn-around times on title orders and real estate closings. I would highly recommend this office to others!

    -Donna Jones Craig Jim Maloof Realtor

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