Title insurance in California | UCOP (2024)

FAQs

Is title insurance optional in California? ›

Lenders will require their own title insurance as a condition of your loan. A lender's policy insures that the lender's security interest in the property has priority over claims that others may have in your property. A lender's policy does not protect you.

In California, there are two types of title insurance policies. The CLTA (California Land Title Association) policy insures the property owner and the ALTA (American Land Title Association) is an extended coverage policy that insures the lender against possible unrecorded risks excluded in the CLTA policy.

Title insurance claim rates are approximately 5 percent, relatively low when compared to other forms of insurance, which often invites skepticism among prospective homebuyers. However, missing from this statistic, are the title snags we encounter that do not result in direct claims by an insured home seller.

It has been the practice in Northern California that the buyer customarily pays the premium for title insurance, or occasionally the premium is split between buyer and seller. In almost every county, the buyer pays the lender's policy premium. The parties are free to negotiate a different allocation of fees.

Title insurance can protect you if someone later sues and says they have a claim against the home from before you purchased it. Legal claims could come from a previous owner's failure to pay taxes, or from contractors who say they were not paid for work done on the home before you purchased it.

As its name suggests, the homeowner buys owner's title insurance, which is in the amount of the real estate purchase, for a one-time fee at closing. It lasts as long as you own or have an interest in the property.

Title insurance costs vary based on location and the price of your home. The title insurance industry is highly regulated, so policies and costs vary from state to state. IIn states like Florida and Texas, title insurance is regulated and fixed by the government.

Title insurance protects home buyers against covered title defects, such as a previous owner's debt, liens, and other claims of ownership. It's an insurance policy that protects against past problems, whereas other insurances usually deal with future risks.

What are the three most common types of title insurance? ›

A standard policy also covers an additional, limited number of risks that are not discoverable through a search of the title plant or public records. The extended policy provides greater coverage than the standard policy.

Be aware that the Real Estate Settlement Procedures Act ("RESPA"), a federal law, prohibits the seller from requiring a buyer to use any particular title insurance company as a condition of the transaction. In California, you can negotiate with your buyer regarding who is to pay for title insurance.

The law says that you must have auto liability insurance. However, if you have a low income, it can be hard to pay the premium. California has a program to help you. This program helps income-eligible good drivers get insurance. The premium for liability coverage varies by the county you live in.

Getting caught driving without insurance in California once typically results in a fine between $100 and $200. Penalty assessments may be added on top of this fine, which could bring the total closer to $400.