For insuring purposes, there must be an established consideration which has been paid in order to establish that grantee is a bona fide purchaser (i.e., purchaser for value and without notice). A conveyance without consideration paid – such as a gift deed for love and affection – may be insured provided the transaction has been investigated and meets Agents National Title’s requirements for insuring gift deeds. A subsequent conveyance to an arms-length bona fide purchaser for value and without notice would be insurable, since consideration was paid and the purchaser/grantee has no knowledge of any outstanding interest held by third parties with respect to the property. Most title insurance policies include an exclusion from coverage which negates liability if the insured is not a bona fide purchaser.
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