When it comes to title insurance,
the choice is yours.
CONSUMER’S GUIDE
TO TITLE INSURANCE
4 BR 2 BA 1 THING
to know before you sign.
What is title insurance?
Are you aware that you have a choice
when selecting a title agency?
Did you know there could be a difference in
price for the same title insurance policy?
Dream
Introduction
For many people the purchase of a home is the American Dream. The purchase of their
home (or other real property) will be the largest purchase they will make. The excited
buyers purchase homeowners or other property insurance to protect their investment.
Some of these new owners shop before purchasing that insurance to ensure they
receive the best deal or best service. However, there is another insurance purchase
made at the same time that is just as crucial — the purchase of title insurance. Yet,
many people do not compare rates and are not even aware that they have a choice in
the selection of title insurers.
The Nevada Division of Insurance has designed this consumer brochure as a tool for
consumers to protect the purchase of their real estate. This brochure is presented in
two parts: 1) Answers to Questions About Title Insurance; and 2) Tips When Buying
Title Insurance.
CONSUMER ’S GUIDE TO TITLE INSURANCE 1
Answers to Questions About Title Insurance
Here, we explain the basics of title insurance including its nature and purpose, the types of policies
available and how to purchase it.
“Title” means the collective ownership records for a piece of property. This includes all previous
transfers of ownership and liens on the property. The title to your property outlines your legal rights to
own, use, possess, control or dispose of the property.
Transferring title to real property, meaning land and any buildings or other improvements built on
the land, is more complex than transferring title to a car or other kinds of property. While land is
permanent, land usage may change over time. For example, you may retain ownership of a piece of real
property while transferring certain rights to the property, such as mineral rights, to someone else.
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What Is a Title Defect or Encumbrance? protection from losses due to unknown future
A title defect or encumbrance is a problem or events such as fire or theft for a specified period
omission in the ownership records of a property of time (e.g. a yearly premium for a year of
that may impair your legal rights to that property. coverage). Title insurance provides protection
Defects in a title may include errors and omissions for a one-time premium for an indefinite period
in recorded deeds, missing or undisclosed heirs, of time from future losses because of events that
conflicting wills, fraud or forgery, mistakes in have already occurred (e.g. claims of ownership).
examining records, liens for unpaid taxes and Because of this, title insurers eliminate risks and
contractor liens. prevent losses in advance through extensive
searches of public records and thorough
What Is Title Insurance? examination of the title.
Title insurance is a contract in which the title
insurance company, in exchange for a one-time For example, in the event that there is a claim
premium at close of escrow, protects against against the title to your property by the ex-wife
future losses resulting from defects in the title to of the seller that was unknown or undisclosed
real property that exist at the time of purchase at the time the title policy was issued, the title
but are unknown or undisclosed. insurer would be obligated to defend that claim
against your property. If it was proven in a court
Title insurance is significantly different from of law that the ex-wife did have a right to the
homeowners insurance and other casualty property, the title insurer would be obligated to
insurance. Casualty insurance provides compensate you for your losses.
CONSUMER ’S GUIDE TO TITLE INSURANCE 3
Owner Lender
What are the Different Types of Title Insurance?
There are two types of title insurance policies—the owner’s policy and the lender’s policy. The owner’s
policy will typically be issued in the form of the Standard Coverage Form in the amount of the purchase
price of the property. It does not cover increases in value unless you purchase an endorsement. It
covers the buyer’s interest in the property for as long as the buyer or his or her heirs have an interest in
the property subject to certain limitations.
The lender’s policy will typically be issued in the form of the Extended Coverage Form in an amount
equal to the mortgage loan. It covers the lender’s interest in the property for the life of the loan. It
provides additional coverage not found in a typical owner’s policy such as unrecorded easements and
boundary discrepancies.
Owners may also elect to purchase a Homeowner’s Policy of Title Insurance instead of the Standard
Coverage Form. Introduced in the 1990s, this policy includes the standard coverages of a typical
owner’s policy and additional coverages, such as forgery occurring after the policy effective date and
increases in the value of the property. The premium for the Homeowner’s Policy is typically 10 percent
higher than the Standard Policy premium.
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Do I Need Title Insurance? I Am Refinancing My Home. Why Does
If you are borrowing money for a piece of the Lender Require a New Title Policy?
property, most lenders will require a lender’s It is not necessary to purchase a new owner’s
policy to protect their interest in the property. policy when you refinance a home. Your original
You are not required to purchase an owner’s policy purchased when you bought your home
policy, but you should weigh the potential is effective as long as you and your heirs have
impact of a loss against the cost of the title an interest in the property. However, most
insurance. Neither the lender’s policy nor the lenders require a new policy based on the new
policy of the previous owner will protect you transaction amount to protect their investment
if there is a claim. Also, there is generally a in the property because defects in title might
substantial discount when a lender’s policy have arisen between the original purchase and
and owner’s policy are purchased together. the refinance. For example, a building contractor
may have put a mechanic’s lien on the property,
I Am Purchasing a Newly-Built Home. or you may have incurred a judgment for unpaid
Do I Really Need Title Insurance? taxes, child support or homeowners association
Even though you are the first owner of the fees. The new policy would also cover defects not
home, there have likely been many previous detected when the previous policy was issued.
owners of the unimproved land. There may be Many title insurers have a discounted rate for
mechanics’ liens on the property placed by lender’s policies on a refinance. Be sure to ask
unpaid contractors and subcontractors. A title your lender or title agent about these discounts.
search will uncover any existing liens, and a
survey will determine the boundaries of the
property being purchased.
CONSUMER ’S GUIDE TO TITLE INSURANCE 5
What Does My Title Insurance Policy Cover?
A title insurance policy protects you from financial loss due to covered claims against your title, pays
your legal costs if the title insurance company is required to defend your title against covered claims
and pays successful claims against your title.
Claims typically covered under an owner’s title insurance policy include:
• Someone other than the insured who owns an interest in the property.
• Forgery, fraud, undue influence, duress, incompetency, incapacity,
or impersonation.
• Defective recording of a document.
• Restrictive covenants.
• Undisclosed liens due to a deed of trust, unpaid taxes, special assessments
or homeowners association charges.
• Unmarketability of title.
• Lack of access to and from the land.
Ask your title insurance agent to explain what is and is not covered under your title insurance policy.
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What Is a Title Search and Examination? How Are Title Insurance Premiums Paid?
Because title insurance covers losses due to Title insurance premium is paid one time at
defects that already exist, a major part of the the time of closing usually through the title
title insurance transaction is the title search agency. It is based on the amount of insurance
and examination. Before issuing a policy, the you purchase. Insurers are required to file their
insurer will conduct a detailed examination of the schedule of rates including any discounts or other
historical public records concerning the property. modifications. Modifications include discounts
These records include, but are not limited to, for short-term policies or refinances, special rates
deeds, mortgages, wills, tax records and maps. for large commercial projects and charges for
optional endorsements.
The title search should show all defects and
encumbrances including judgments, liens and Title Insurance Rates are available to view and
other restrictions. According to the American compare online at [Link].
Land Title Association, 26 percent of title
searches find a problem which the title insurer Local custom determines who pays the premium
cures before issuing the policy. After the title for title insurance. In Nevada, the seller usually
search and examination, the insurer will issue a pays the premium for the owner’s policy and the
Preliminary Report of Title or Commitment for buyer usually pays the premium for the lender’s
Title Insurance listing the existing encumbrances. policy. This may, however, be negotiated between
If these encumbrances cannot be cured, they the buyer and seller. There is a substantial
are excluded from coverage. Title insurance discount for the lender’s policy when purchased
provides protection against undisclosed defects. simultaneously with the owner’s policy.
It is generally not intended to protect against
defects that are uncovered by the title search
but cannot be cured.
CONSUMER ’S GUIDE TO TITLE INSURANCE 7
Research Verify Select
Where Can I Purchase Title Insurance?
Although your real estate or mortgage broker may recommend a particular title agency, Nevada law
prohibits them from requiring that consumers use a particular agent or insurer. You may purchase title
insurance from any title insurer authorized to do business in Nevada. You should verify that an insurer
is authorized in Nevada at [Link] or by calling toll-free anywhere in Nevada (888) 872-3234.
In order to help you make the best purchasing decision, the Division now has an online Title Insurance
Rate Comparison Tool, which allows you to put in the purchase price, down payment, county and other
details to then view and compare the title insurance and escrow rates available in your area.
This comparison tool can be found at [Link].
Title insurers may offer their policies directly to consumers through affiliated or independent agents.
Different title agents – also known as title companies – may offer different services, and title insurance
rates and escrow fees may vary between companies. Again, you may purchase title insurance through
any Nevada licensed title company. Verify a title agent’s license with the Division of Insurance online at
[Link]/LICENSING-SEARCH or by phone at (888) 872-3234.
There are many reasons a real estate or mortgage broker may recommend a title agency. The title
agency may be conveniently located or may provide efficient and accurate service. However, the broker
may have a financial interest in the title agency or other business incentives to refer customers to the
agency. For this reason, it is important to shop around and make the selection that makes the most
sense for your situation.
Some factors to consider when choosing a title agent or title insurer are the cost of the title insurance
and escrow fees, speed and accuracy of closing services, quality and timeliness of claims resolution
and frequency and resolution of consumer complaints filed with the Division of Insurance. Ask friends,
relatives or business associates regarding their experience and satisfaction with a title agency. Or, you
can contact the Division of Insurance and inquire about the number of complaints received and the
nature of those complaints.
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What Should I Do if I Have a Claim? Short Sale and Foreclosure – During times of
Be sure to keep a copy of your title insurance policy. economic downturn, the real estate market includes
As soon as you discover a title-related problem, more and more short sales and real-state owned (REO)
properties. A short sale is one in which the sale price
contact the insurer listed on your policy. Make your
of the property is less than the amount owed on the
claim in writing and include copies of all relevant mortgage. Because of this, the lender must approve
documents including any correspondence related any short sale before it occurs. REO properties are
to the claim. Keep copies of all documents for owned by the lender as a result of an unsuccessful sale
your own records. Nevada law requires insurers to at a foreclosure auction. You may get a better price on
acknowledge receipt of a claim within 20 working a short sale or REO property, but they have their own
pitfalls. There may be lengthy delays in the process. A
days after receipt of the claim notice and to accept
typical real estate closing takes six to eight weeks. A
or deny a claim within 30 working days after short sale or REO cloing may take six months to a year.
receiving properly executed proofs of loss. There also may be additional transaction costs, such as
transfer taxes or outstanding fees associated with the
What Other Costs May Be Involved? property, such as HOA fees. Because short sales and
REO closings involve more time and expense for the title
Escrow Fee – Besides title insurance premiums, company than a regular closing, many title companies
you must pay the title company a fee for escrow impose a short-sale fee or REO fee on top of the basic
escrow fee. Different title companies have different fees.
and closing services. This is called the escrow fee.
Be sure to shop and compare prices before selecting a
Escrow and closing services generally include
title company.
holding the purchase funds in an escrow account
and distributing them to the proper parties at the
Private Transfer Fee – Private Transfer Fee (PTF)
close of sale, gathering all required documents
covenants became common in the mid-2000s. A PTF
and presiding over their signing, and recording
covenant requires that each time the home is resold,
the deed. Nevada law requires each title insurer
a percentage of the sale price is paid to the original
and title agent to make available to the public its
developer. A typical PTF covenant requires that for the
schedule of fees and charges, including escrow fees.
next 99 years, when the buyer and any subsequent buyer
Some title companies have the schedules available
resell the home, they must pay a 1% fee to the developer.
on their website.
The Nevada legislature prohibited any new PTF covenants
created after May 20, 2011. However, any PTF covenant
created before that date is still enforceable provided it has
been properly recorded in the county recorder’s office.
CONSUMER ’S GUIDE TO TITLE INSURANCE 9
Where Can I Find More Information?
For questions or problems with title insurers or title agents, contact the Nevada Division of
Insurance toll free in Nevada at (888) 872-3234, the Carson City Office at (775) 687-0700, or the
Las Vegas Office at (702) 486-4009. Visit our website at [Link] for other consumer guides.
For questions or problems with mortgage lenders and escrow companies licensed in this
state, contact the Nevada Division of Mortgage Lending at (702) 486-0780, or visit its website
at [Link].
For questions or problems with real estate agents and brokers licensed in this state, contact
the Nevada Real Estate Division at (702) 486-4033, or visit its website at [Link].
For information on title insurance and title agents, contact the American Land Title Association
toll free at (800) 787-ALTA, or visit its website at [Link].
For information on buying or selling a home, contact the U.S. Department of Housing and
Urban Development at (202) 708-1112, or visit its website at [Link] for information
regarding the federal Real Estate Settlement Procedures Act (RESPA).
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CONSUMER ’S GUIDE TO TITLE INSURANCE 11
Tips When Buying Title Insurance
Here are some things to keep in mind when buying title insurance.
• Verify that the title insurer and title agent are licensed to conduct business in Nevada.
You can verify the status of a license by visiting the Division’s website at [Link].
• Compare title insurance and escrow rates at [Link].
• Check that the policy amount is correct. The owner’s policy should insure the full purchase
price of the property. The lender’s policy should provide coverage equal to the amount of
the mortgage loan.
• Determine who is going to pay for each policy. In Nevada, the seller usually pays for the
owner’s policy and the buyer pays for the lender’s policy. However, this may be negotiated
between the buyer and seller.
12
• Verify the effective date of the policy. It should be the same date as the close of escrow.
• Check to make sure that the policy describes all of the property being purchased and
all the interests being acquired by you.
• Read and understand the terms of the insurance contract, including any limitations and
exclusions in the policy. Ask your agent if you do not understand something.
• Make sure the name of the insurance company and the title agency appear on any legal
documents in case you need to file a claim or file a complaint in the future. Keep these
documents in a safe place.
• Check with your title agent to see if your purchase may qualify for any discounts on title
premium or escrow fees. Some title insurers and agents offer discounts for short-term
financing or refinancing.
• Title insurers may offer concurrent or reduced rates if they are providing both the owner’s
policy and lender’s policy in the same transaction.
• Compare rates, services and policies offered. Talk to your title insurance agent about
which policy (standard, extended or homeowners) is right for you.
• Your real estate or mortgage broker might have an ownership interest in the title agency
selected to close the loan. Ask about any and all relationships with the title agency.
• Report any suspicious activity to the Division of Insurance. Rebates are illegal in Nevada.
• Remember: you are able to choose any title insurer/agent you desire. You are not
required to use any title insurer or title agent suggested or recommended by a
lender or real estate agent.
CONSUMER ’S GUIDE TO TITLE INSURANCE 13
14
Compare Rates Online
Search and Compare Title Insurance and Escrow Rates Online
Before choosing a title insurance company, use the Division’s Title Insurance Rate Comparison
Tool to view and compare custom title insurance and escrow rates at [Link].
The title and escrow rates listed are based on rates approved by the Division of Insurance for basic title
and escrow services in conjunction with a real estate and mortgage transaction in order to provide a
fair basis of comparison among companies.
Services provided in these basic rates include: • Communication
• Review, compliance with, and • Local delivery
downloading of instructions • Ordinary mailing and postage
and documents • Ordinary
emails, faxes and phone calls
• Preparation of commission instructions
and escrow instructions There may be additional charges or
• Procurement of demand statements discounts applicable to your particular
• Ordering of preliminary reports/ transaction. Some examples of discounts
commitments and additional fees include:
• Figuring files • First-time homebuyer discount
• Complying with lender requirements • Senior citizen discount
• Procuring proper signatures, including • Document preparation fee
loan documents, as necessary • Overnight delivery fee
• Preparing closing statements • Real estate owned transaction fee
• Receiving and disbursing funds • Wire fees
This Consumer’s Guide to Title Insurance is intended to assist consumers in understanding title insurance. It is not
intended as an “all inclusive” informational source. Please refer to your title insurance policy for coverage details.
CONSUMER ’S GUIDE TO TITLE INSURANCE 15
State of Nevada
Department of Business and Industry
Joe Lombardo, Governor
Dr. Kristopher Sanchez, Director
Division of Insurance
Scott J. Kipper, Commissioner
If you have a question about this guide or about a title insurer or agency, please contact:
Carson City Office Las Vegas Office
1818 College Pkwy., Suite 103 3300 W. Sahara Ave, Suite 275
Carson City, NV 89706-7986 Las Vegas, NV 89102
Phone: (775) 687-0700 Phone: (702) 486-4009
Fax: (775) 687-0787 Fax: (702) 486-4007
Website Address: [Link]
E-mail Address: insinfo@[Link]
Consumer Services Section
For consumer complaints, contact one of our Consumer Services Sections:
Carson City: (775) 687-0700
Las Vegas: (702) 486-4009
Toll-Free anywhere in Nevada (888) 872-3234
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CONSUMER ’S GUIDE TO TITLE INSURANCE 17
An important
A pool. A spa. decision before
you sign.
