Frank Pellegrini, CEO, Prairie Title

Whether you’re purchasing a new or existing home, or refinancing, title insurance protects you against any problems affecting the title to your home.

The Basics

There are two types of title insurance: the owner’s policy and the lender’s policy. The owner’s policy (paid for by the seller in Northeastern Illinois) protects your property rights as the homebuyer, whereas the lender’s policy insures the financial investment of the bank or lender. If someone else claims ownership of your property, your title insurance underwriter typically defends you legally and financially.

Enduring Value

Owner’s title insurance is a low, one-time fee based on the value of your home. For example, the typical owner’s title insurance policy costs an average of 0.5% of a home’s purchase price. With a home being one of the largest investments you’ll ever make, it’s clear why getting owner’s title insurance is such a smart way to give yourself peace of mind.

Common Risks: What does owner’s title insurance cover?

Sometimes undiscoverable defects can come up after the title search. Under an owner’s title insurance policy, you are protected against defects in the title.

Covered Title issues include: 

  • Outstanding mortgages, judgments, or unpaid taxes
  • Pending legal action against the property that could affect you
  • Unknown heir of a previous owner who is claiming ownership of the property
  • Fraud
  • Forgery
  • Clerical errors: inconsistent paperwork or faulty historical records


When you refinance, you are obtaining a new loan, even if you stay with your original lender. Lenders will usually require a new title search and lender’s policy to protect their investment in the property. Fortunately, homeowners don’t need to purchase a new owner’s policy—the one you bought at closing is good for as long as you or your family own the property. However, you may want to contact your title company to update your policy to reflect changes in your life.

Who Chooses the Title Company?

Ultimately, you do. In Illinois, consumers have the right to choose the title company they want to use for the title search process and closing. Many sellers rely on their broker, lender or real estate attorney to help with the selection of a title company since they are well informed about local real estate services providers. We advise consumers to shop for a title company and to base their decision on experience, expertise, reputation and, of course, price.

Is the underwriter important?

Absolutely. One of the enduring myths of our business is that “title insurers never pay claims.” In fact, the industry as a whole pays out hundreds of millions of dollars in claims every year. That’s a small amount compared to property and casualty insurers, but their insurance protects against unforeseeable future occurrences while title company work is entirely preventative. The less we pay in claims, the better we are doing our jobs.

And just in case, Prairie Title is an agent for six of the best underwriters in the business, including two of the largest, most financially sound companies in our industry.

For more information, visit, come see us at our office on North Avenue, email us at, or call us anytime at 708-386-7900.The American Land Title Association also has all the information you need. Visit to learn more about title insurance and the home closing process.

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