Title insurance works differently then other kinds of insurance because you only pay the premium once up front, and the insurance will protect you and heirs for as long as you own the property. There are no renewals or expiration date. It is customary for the seller in Los Angeles to pay for the buyers title insurance. If the buyer is making the purchase with a loan, the lender requires that the buyer pay for the lender’s title insurance. Lender title insurance is a different insurance than Title insurance and is customarily paid for by the buyer.
Title insurance companies record the grant deed at the County Recorders office, which is the legal device that transfers title. Have you ever wondered how deeds are recorded? It is done in a very old fashion way. Each weekday, Title Insurance Company send their field reps to line up at the Courthouse and record the grant deed. On recording day, you can ask your escrow officer what number you are in line (its kind of like grabbing a ticket at the deli counter of your local supermarket). The title insurance coverage begins the moment the deed is recorded.
While you are in escrow, the title insurance company will produce a preliminary title report (prelim) as part of the necessary disclosures that will tell you if the property has clear title or if there are any issues that need to be resolved before close of escrow. Pay extra attention to the list of “exclusions”, if there are any, on the Prelim – as these items will not be covered. Find out what needs to be done to remove exclusions. Any problems or defects the title company finds on their title search are known as “clouds” on title.