Title Insurance

Title insurance protects property buyers and lenders from financial loss due to defects in the property’s title that were not discovered during the title review. In Vermont, common title issues can include unknown liens, errors in past deeds, missing probate documentation, boundary disputes, or undisclosed easements. A title insurance policy helps ensure you are acquiring clear, marketable title and protects your ownership rights long-term.

• Lender’s Title Insurance protects the mortgage lender’s financial interest in the property. It is typically required by the lender whenever financing is used.

• Owner’s Title Insurance protects the property owner’s investment and remains in effect for as long as the owner or their heirs own the property.

Both policies are based on the same title search, but they protect different interests. A Vermont real estate attorney explains both options and recommends appropriate coverage for your situation.

Title insurance premiums in Vermont are based on the purchase price of the property or the loan amount (for lenders). Rates are typically approved by state regulations and will vary depending on the type and amount of coverage. Your attorney reviews the title insurance commitment at closing and explains all title insurance charges so you understand exactly what you are paying for.

An owner’s title insurance policy typically remains in effect for as long as the owner or the owner’s heirs retain an interest in the property. Unlike many other types of insurance that require annual premiums, title insurance is generally purchased with a one-time payment at closing and continues to protect the owner’s interest for the duration of ownership.

In many situations, title insurance provides coverage for legal defense costs if a covered claim is made against the property’s title. If someone challenges the owner’s right to the property or asserts a covered claim, the insurance company may defend the insured owner in court and pay covered losses up to the limits of the policy.

Title insurance may protect property owners if errors in recorded documents affect the ownership of the property. For example, incorrect indexing of deeds, or other recording errors in the public land records can sometimes create title problems. If a covered error later affects the owner’s rights, the policy may provide protection against resulting financial loss.

Yes. One of the risks title insurance can cover is a claim by an unknown or previously undisclosed heir of a former owner who asserts an ownership interest in the property after the sale. If such a claim arises and it is covered by the policy, the title insurance company may provide legal defense and financial protection for the insured owner.