At South Oak, we provide title insurance policies for both lenders and owners. South Oak Title is an agent of Stewart Title and Title Resources Guaranty Company.
Lender's Title Insurance
Lender’s title insurance, also known as a loan policy, protects the mortgage lender from any potential future title issues for the life of the loan. Lender’s title insurance is almost always required by lenders to protect their interests. This policy is in effect for the life of the loan and for the size of the loan. The coverage for a loan policy gradually decreases as the loan is paid off.
The lender’s title insurance is paid for by the borrower/homebuyer but does not extend to the buyer. Separate title insurance is needed to protect the homeowner from potential title issues.
Standard Owner's Title Insurance Policy
Standard owner’s title insurance coverage provides the same protection offered by lender’s title insurance, but it extends that coverage to the buyer. The standard owner’s policy covers the most common potential risks to your title. This policy is in effect for the entire time the homeowner is in possession of the property, not just for the life of the loan. Coverage also extends to anyone who may inherit the property, serve as the trustee of an estate-planning trust, or who becomes the beneficiary of the trust.
Standard owner’s title insurance covers hidden risks to your title, including but not limited to:
- Prior forgery or fraud affecting the title, including forged deeds or wills
- Undiscovered liens, including liens for unpaid taxes or HOA fees
- Undisclosed or missing heirs
- Errors in recording documents
Standard owner’s title insurance premium rates are based on the purchase price of the home and it is purchased at closing as a one-time fee.
Enhanced Owner's Title Insurance Policy
We also offer enhanced owner’s title insurance coverage to homebuyers. This enhanced policy extends the protection offered by the standard owner’s policy. It includes all of the coverage provided by the standard policy as well as additional coverage for a number of less common hidden risks to your title, including, but not limited to:
- Mechanics Liens
- Existing HOA covenant violations
- Existing violation of zoning laws
- Damage to existing structures or improvements due to easement access
- Covers rent and relocation expenses if you cannot use your home due to a claim
Unlike the standard owner’s policy, the enhanced policy also covers risks that occur after the deed has been recorded. The enhanced policy amount automatically increases up to 150% of the value of the home over five years. Enhanced owner’s title insurance costs about 10% more than a standard owner’s policy. Click here for a more detailed comparison of standard and enhanced owner’s policies.
Rates are currently available for our Birmingham offices. Rates are coming soon for our other Alabama and Florida locations.