Virginia maintains a robust set of laws and protections that govern the home buying process, for both the seller and the buyer. As you consider the large financial investment that is purchasing a property, one of the protections that you may choose to take advantage of is your access to title insurance.
Title insurance requirements vary by state, but in Virginia, you can rest assured that the process will be comprehensive and provide you with a policy that will protect your new home from formerly undisclosed issues as long as you are aware of your own coverages and exceptions.
Title Defects Must Be Disclosed If Known
The primary advantage of title insurance is that it safeguards your financial investment when you purchase a property; if the former owners had failed to pay property taxes or otherwise were subject to a lien on their home, this information may slip through the cracks during a purchase. If the title of the property is transferred to you without knowing about the lien, as the new homeowner, you would then be responsible for paying off the lien, even though you had no part in its creation.
However, one of the requirements of title insurance is that it fully discloses any such problems to you as soon as they are known. Most commonly, this will arise as part of a title search that is conducted prior to approving your policy. Additionally, much like substantial issues with the home are the responsibility of the seller to declare, sellers should notify their agents of such title problems. In the event that they do not, title insurance still serves as a backup.
The Lender Generally Requires Their Own Policy
Another common requirement with title insurance in Virginia is that the lender will require their own policy. Many homeowners find themselves misunderstanding their mortgage and closing paperwork because they see that one of their fees is for the purchase of lender’s title insurance. Thus, they assume that they have already purchased a policy for themselves, only to discover later that they are not covered at all.
Lenders typically require that the buyer purchase a policy that specifically covers the lender so that, should an issue arise that makes the mortgage unenforceable, the lender does not lose their money. This coverage does not extend to the buyer, who will need to secure their own policy.
There Is No Set Mandate for Who Pays the Premium
Contrary to popular belief, there is no requirement that either the buyer or seller purchase the buyer’s title insurance in Virginia. Some sellers may offer to do so in order to improve the deal on the property and encourage a buyer to close, but it is not the seller’s responsibility to do so. If the seller does not offer to purchase title insurance, the buyer may do so on their own.
Agencies Claiming To Be Licensed Insurers Must Be Registered With The State
You should always keep your insurance policies limited only to agencies that are licensed in the field. In Virginia, any agencies that claim to carry the proper licensing documents must register with the state as proof of proper licensing, and as a buyer (or even a seller), you can check on these details yourself.
The State Corporation Commission keeps detailed records of all licensed insurance agencies, which can be found here. It is important that you vet any potential insurance agency that you would like to work with for title insurance to ensure that your purchase is enforceable and will protect you as intended.
Selling insurance is a regulated industry for which a license is required, and any agency that does not maintain a license is likely to compromise in other critical areas as well. Unlicensed agents also cannot secure insurance against mistakes, which means that if your agency makes an error that costs you and you seek legal action, the agency may not have enough money to pay for the damages.
Trust The Experts To Assist You In Securing The Perfect Title Insurance
Whether you are just learning about how title insurance can help you for the first time during your home buying journey or you are ready to acquire a policy prior to (or even after) your closing, be sure to trust the experts.
The professionals at Mathis Title Company would be happy to answer any questions that you may have. They can take the time to demonstrate their compliance with all of the critical requirements that Virginia mandates. Reach out to learn more about their services or to get started on a title insurance policy.