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          Introduction to Title Insurance

What is Included in the Title Insurance Commitment

The information that is gathered from the examination of the
documents included in the chain of title report is used to
generate the title insurance commitment.  

The commitment includes a list of all of the documents and
instruments that the insurer underwriting the policy intends to
exclude from the coverage of the title insurance policy.  It is
those documents from the chain of title report that currently
affect the real property that, in large part, make up this list of
exceptions to the coverage from the title insurance policy.  
These title insurance exceptions are often listed in a schedule
titled Schedule B-II and any loss that results from any of these
instruments is excluded from the coverage of the title insurance
policy and will not be covered by the policy

The commitment also includes a list of the requirements that
must be satisfied at or prior to the closing as a condition to the
issuance of the title insurance policy.  These requirements are
dictated by the instruments found in the chain of title report that
affect the title to the real property and they are often listed in a
schedule titled Schedule B-I.  Typical requirements for the
issuance of a title insurance policy include, but certainly are not
limited to, proper conveyance of the insured property interest to
the new owner, proper granting of the insured mortgage, the
individuals executing the closing documents obtaining proper
authorization to so execute the documents, and the satisfaction
of prior mortgages.  The insurer underwriting the policy may
also require defects in title be cured prior to the issuance of the
title insurance policy.

The title insurance commitment also includes the following basic
terms: the effective date of the title insurance commitment which
is the date through which the Public Records have been
searched to produce the commitment (this date is important
because a title insurance policy must be issued within a finite
period of time after the effective date of the underlying title
insurance commitment, usually six months), a statement as to
the type of title insurance policy that will be issued based upon
the commitment, the amount of insurance coverage that will be
provided by the title insurance policy (this is the aggregate limit
or maximum amount of loss and damages that the insurer
issuing the title insurance policy will pay pursuant to that policy),
the name of the party that will be insured by the title insurance
policy, how title to the real property is currently held, the legal
description of the real property that will be covered by the title
insurance policy, and the amount of the one time insurance
premium required for the title insurance policy.

The commitment usually will also include pro forma
endorsements if any endorsements are to be made a part of the
title insurance policy.  Title insurance policy endorsements are
riders to the policy that provide coverage which is typically
excluded by the standardized terms and conditions of the base
title insurance policy.  Endorsements must be requested and
usually require the payment of additional premium for the
additional coverage they afford.

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Law Office of
Craig W. Little, P.A.