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How To Check If I Have Title Insurance On My Property?

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It doesn’t have to be your debt for there to be a lien on your property. For example, if the last owners of the home weren’t paying their property taxes, the IRS might put a lien on the home. Overall, you’ll want a reputable, stable company what does comprehensive insurance cover that you can expect to be around decades from the time you buy your home. As you compare providers, don’t be afraid to ask prospective companies if they’ve had any claims and if they have any insurance protection of their own.

With title insurance, buyers and lenders are protected against any deficit in the title that might cause serious losses. Title insurance policies are indemnity policies that typically protect against losses arising from events that occur before the date of the policy, which is the date of closing. This is different from other types of insurance policies, such as auto or life insurance, which protect against losses resulting from accidents or events that occur after the policy is issued. You may also purchase, at an additional cost, optional endorsements to cover risks that are not included in the standard or extended coverage title insurance policies. Endorsements are available to provide coverage against environmental protection liens, enforcement of covenants, conditions and restrictions, damage due to water and mineral development, accuracy of boundaries, and other potential risks. Endorsements may also add additional named insureds, such as your inter vivos trust (which some call a “living trust”).Be sure to discuss available optional endorsements with your title company or its title marketing representative.

However, there are different levels of coverage, so you will want to ask about the benefits of each level and determine which is best for your situation. Is it to protect the buyer or the title company that did the title search? Is there some reason I should buy insurance to protect me and the title company?

For that you need an owner’s title policy for the full value of the home. In many areas, sellers pay for owner policies as part of their obligation to deliver good title to the buyer. In other areas, borrowers must buy it as an add-on to the lender policy.

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Real estate investors should make sure that a property does not have a bad title before proceeding with any purchase. Homes inforeclosure, for example, may have a number of outstanding issues. Buyers may consider purchasing owner’s title insurance to protect themselves against unforeseen claims against the title.

A frustration for us is that it appears that the only way to prove a claim against the insurance would be to get a land survey done, which defeats the purported main selling feature of the insurance. What has been reported to us is “get title insurance for $250 and avoid a $500 survey”. If you need a survey to prove a claim against the insurance, and if the survey negates the need for insurance, is the $250+ cost of the insurance have value? The promoters of the misleadingly named insurance appear to have a vested interest in the sale of the product according to the insurers own promotional materials. Frustrating to us is that the promoters are telling consumers during the home buying process that if they do not buy title insurance they will have to get a land survey done, which is not necessarily true. We do not tell homebuyers to get a survey done to avoid paying for title insurance, although this may be true.

Should some claim arise that was before the policy was issued, title insurance should protect the new owner for up to the face value of the policy. The price of a title policy is directly tied to the face value of the policy. Many title companies will have a title insurance calculator available to estimate what your policy will cost.

An owner’s policy is based on the home’s purchase price, while a lender’s policy is based on the loan amount. Both policies together usually cost about 0.5% to 1.0% of the home’s purchase price, or $1,500 to $3,000 on a $300,000 home, according to the American Land Title Association , a large national trade group of title agents. Anything you might want to know about your property or its “chain of title” is usually found in a records search.

Are There Items Excluded From Closing Protection Coverage?

You should be able to save if you purchase both the lender’s and owner’s policy from the same provider. If you’re buying a home, you may be able to secure a discounted rate (up to 40% off) if the seller has an owner’s policy in force at the time of sale. If you are refinancing, you probably also qualify for a reissue rate. If you’ve watched nighttime cable news programming in the past few years, you’ve probably seen commercials from companies offering protection from real estate property fraud. Known generally as “title lock insurance,” this product claims to protect your property from both title fraud and the resulting financial losses. If you do shop around for allstate homeowners insurance, you want to make sure to know which services are included in the fee or required by the state.

Remember that title insurance is also insuring the closing goes right. First American Title Insurance Company is one of the largest providers of title insurance in the United States. In 2019, First American wrote more than 50,000 policies in New York State. The New York State Department of Financial Services today filed a statement of charges against First American Title Insurance Company. These charges are the first to be filed alleging violations of DFS’s Cybersecurity Regulation, Part 500 of Title 23 of the New York Codes, Rules, and Regulations. Make sure you are receiving all your bills, such as the tax bill, water bill, mortgage bill and so on.

Title insurance is a policy that provides coverage for risks that could impact the ownership of your home and your legal rights to it. While title insurance is common in the United States, it’s still a relatively new product to the Australian market. Your title policy is an important document — evidencing the contract of insurance between the owner of the property and the title insurer — and should be kept in a safe location in case any issues arise later.

There are lawyers and even some real estate agents that do not promote using title insurance, but they are the few. The law society of Manitoba ensures that their members protect the public and not mislead them about services or a product. However, the insurance companies openly promote to each lawyer that there is a benefit to them. My college roommate and her husband recently ran into some trouble when refinancing with an unresolved lien against the former owners that didn’t get caught when they purchased their house.

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Although a title insurance policy may be issued in connection with a warranty deed, a title insurance policy can also be issued in a transaction that uses a quit claim deed or other form of deed that does not provide a warranty of title. If a lawsuit arises due to any of these issues, the title insurance company will defend the lawsuit and, if the title insurance company loses the lawsuit, pay any claims relating to the lawsuit. When you purchase a home, the lender or attorney will request a title examiner to perform a title search for closing. A title search gives a history of the property including its previous owners and, depending on your state, the required search period could range between 40 and 70 years. The examiner would head to the local courthouse and perform the search and pull copies of applicable documents. The typical closing protection letter contains a few exclusions from coverage, whereby the title company is not liable to the lender under the terms of the letter.

The lender’s policy expires once the loan has been paid in full and satisfied. You will likely be required to purchase lender’s title insurance each time you refinance or buy a new home. As with most insurance products, investing in insurance protection is a personal choice. Some mortgage lenders will require you to pay for a policy to protect them when you get a new mortgage.

A title claim could arise at any time, even after you’ve owned the property with no problems for many years. Someone else might have ownership rights that you don’t know about when you make an offer to buy a property. Even the current owner might not be aware that someone else has a claim on the property. In the case of an overlooked heir, even the person who has those rights might not know they have them. The most basic extended coverage policy occurs when the standard exceptions have been removed.

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Unlike traditional insurance, which protects against future events, title insurance protects against claims for past occurrences. Still, if you want to protect yourself from potential legal costs in the future, you may choose to get a title insurance policy. Although you may still pay for owner’s title insurance, there are many other ways you’ll save money by paying cash. If you take out a 30-year 4 percent loan on a $200,000 house, you’ll pay more than $140,000 in interest, assuming you stay in the home for the entire 30 years.

Since term life insurance is an evidence-producing/loss-prevention line of insurance, its loss expense is less than – and its operating expense is greater than – that of other property/casualty lines of business. Insurance expenses are loss-prevention,, underwriting-related and loss-related. One positive result of the decline in housing prices combined with low interest rates has been that housing usually becomes more affordable. The Housing Affordability Index measures housing affordability as represented by a household earning the median income to qualify for a mortgage loan with a 20% down payment on a median-priced home. An index of 100 means a typical family has just enough income to afford a median-priced house.

Tips For Shopping For A Title Insurance Policy

Should a title defect eventually become apparent, the lawyer would be responsible to the client only for any negligence in the searching process and not for information undiscoverable by the searcher. In other words, should a loss occur which could not be attributable to the attorney’s or searcher’s negligence, the individual suffering the loss would not be able to seek reimbursement from the attorney or searcher. Should there be a loss, would it become evident in time for suit to be brought within this prescribed period? If not, the party suffering the loss would forever be unable to sue the attorney for the alleged negligence.

Or what if a previous owner used the home as collateral for a business loan, and never paid that loan off? Any of those might be grounds for claiming on a lender’s or owner’s title insurance policy. Although owner’s title insurance is technically optional, real estate experts strongly recommend you buy this coverage. In almost all circumstances, the property owner redeems the property by paying the new taxpayer, and, in D.C., with 18 percent accrued interest. But in my situation, while the Texas LLC paid the previous owner’s property taxes, the previous owner had not redeemed.

Title insurance is a contractual obligation that protects against losses that occur when title to a property is not free and clear of defects (e.g. liens, encumbrances and defects that were unknown when the title policy was issued). The terms of the policy define what risks are covered and what risks are excluded from coverage. The title insurer will reimburse you or your lender for losses that are covered, up to the face amount of the policy, and any related legal expenses. This protection is effective as of the issue date of the policy and covers defects arising prior to your ownership. Title companies issue policies on all types of real and personal property.

We offer comprehensive title insurance services through a network of highly qualified and experienced independent agents and approved attorneys. We are licensed to underwrite title insurance in Pennsylvania, Maryland, Delaware, New Jersey, New York, Ohio, Indiana, Virginia, Kentucky, Tennessee, South Carolina, Georgia, Alabama, Mississippi and the District of Columbia. Whether you are an independent agent or an approved attorney seeking an underwriter or a consumer in need of title insurance, we hope you find the information here helpful and we hope to earn your business. Quit Claim Deeds and/or Lien Releases from those parties with an interest.

He is admitted to practice law before the State Bar of California, and the United States District Court for the Northern District of California. Ken is an active member of the American Bar Association, San Francisco Bar Association, and the California Lawyers for the Arts. Limitations of the owner’s property rights such as mortgages, easements and liens. Discloses the total policy premium , along with an explanation of how the premium is divided among the various parties who may be responsible for examining title and issuing the policy.

The premium charged varies from state to state, but it is usually 1 percent the purchase price of the property, according to the American Land Title Association . In California, for example, owner’s title insurance ranges from $1,200 to $2,000 for a $500,000 home, says the California Land Title Association. In case of a borrower’s default, if there are any issues with the property’s title, a lender would be covered up to the amount of the mortgage. To prevent abuse, the Real Estate Settlement Procedures Act prohibits sellers from requiring purchase from a specific title insurance carrier. Yes, it is generally good to shop around, but if you are close to closing and the title search has already been performed then it is unlikely to save money at this point. The new provider of title insurance will need to do their own title search (they can’t rely on the one that has been done) and you may have to pay the first title company a small fee for the search they have already completed.

Can You Buy Title Insurance After Closing?

If you have any questions about what is included with your insurance, again, check with your lawyer. When researching this post, I asked a couple of insiders for examples of the most outrageous claims they’d encountered over the years. Borrowers aren’t typically aware of this clause, and it is currently under review by the insurers because about half of the claims made under this portion of the coverage are for amounts of $100,000 or more. In fact, some title insurers are already limiting coverage to $30,000 in specified areas . For example, some will index your total coverage amount to inflation, which means your maximum payout will grow with the rate of inflation using a set formula. Be sure to ask about the features included in the policy recommended by your lawyer.

Defects would include another person claiming ownership in the property, document forgery, fraud, liens, encroachments, and many other issues which would affect having clear title to the property. For those looking to refinance their home loan, the title search can also provide information that may have been missed at closing, such as an old open mortgage, or if a lien was placed on the property mistakenly. To sum it up, the title search will let you know if the seller has a saleable interest in the property, if there are any restrictions or allowances to use the land, and what liens should be paid off at closing. By having all of this information, purchasers and borrowers are better able to make informed decisions about their purchase.

Please know that investing in any asset involves risk and you should therefore consult tax, legal and financial experts before investing as individual results may vary. Title insurance does protect the lender, but also it protects you from buying an asset that could become either worthless or a huge liability because of your lack of knowledge, or the seller’s lack of disclosure. Unfortunately, the couple didn’t tell anyone about the home purchase. Had I known they were getting such a “great deal,” I would have suggested they get title insurance. Our flat-rate service fee saves you money by taking a time consuming task off of your desk for a fraction of what it would cost elsewhere. A title insurance organization must maintain a fidelity bond or a professional liability insurance policy in an amount no less than $250,000 [31A-23a-204].

Title insurance is a contractual obligation that protects against losses resulting from various types of defects, as described in the policy, that may exist in the title of a specific parcel of real property. Nearly all mortgage lenders require that the home buyer purchase the lender’s title insurance policy for an amount equal to their mortgage loan. The lender’s insurance policy will remain in effect until the amount financed has been repaid, the property is resold or until refinancing has occurred. Having no title insurance exposes transacting parties to significant risk in the event a title defect is present. Consider a homebuyer searching for the house of their dreams only to find, after closing, unpaid property taxes from the prior owner. Without title insurance, the financial burden of this claim for back taxes rests solely with the buyer.

The lender’s policies include a form specifically for construction loans, though this is rarely used today. A recording system combined with title insurance decentralizes records, creating redundancy. For example, when many records were destroyed in San Francisco’s 1906 earthquake, out-of-town title companies maintained records that allowed landowners to prove ownership of their property. A loan policy provides no coverage or benefit for the buyer/owner and so the decision to purchase an owner policy is independent of the lender’s decision to require a loan policy.

Protect your home from the costs of malicious damage with home insurance. Find out what your home insurance may cover you for if your property has been impacted by the severe weather of Ex-Cyclone Seroja. This insurance also protects you from risks that arise in the future. These can be risks such as forgery and fraud, encroachments and unregistered easements on your property. We’ll break down exactly how it works and what makes it so important.

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Since you’re being promised clear title, any clouds that emerge are the seller’s problem, not yours. The closing agent will normally call the seller’s real estate agent or attorney if the report shows a defect. Most sellers agree to pay off any liens through a deduction from the purchase money at closing.

The title and escrow industry in Utah is regulated by the Insurance Department. Title and escrow most often come into play when purchasing a home, but are also involved in other types of real estate transactions. To understand how startups are beginning to challenge title insurance incumbents, we need to first understand what title insurance is and what title companies do. In most provinces, for example, Alberta and Ontario, there is no requirement for title insurance.

  • The owner policy also provides that the title insurer will pay the costs, attorney’s fees and expenses incurred in defense of the title, in accordance with the policy’s terms.
  • Statewide, the subescrow fee for Sale Transactions shall be $125, and the subescrow fee for Loan and Refinance Transactions shall be $45.
  • Keep in mind that some states regulate how much you can be charged, and that you could negotiate with the seller to have them pay for both lender’s and owner’s title insurance policies.
  • More simply, title insurance is an agreement that should a problem arise in the ownership records of your property, your insurer will fix the problem, defend you against it, or compensate you for any losses.

Kahane Law is determined to bring you informative, useful legal information in short easy to watch videos. Our blog features weekly posts about wacky laws, what’s new in legal news, as well as informative articles on all areas of law. Overall a $200,000 home in Ohio will cost around $1,087 and $763 for owner’s and lender’s policy respectively, totaling up to $1,850. Get an estimate of exactly what fees each party pays for to settle the transaction. The Owner’s Policy insures the new owner/home buyer, and a lender’s policy insures the priority of the lender’s security interest.

This discount is dependent upon the title insurance underwriter as well as the property’s location, but it can lower the cost of your policy premium by up to 40%. Insurance against loss due to an unknown defect in a title or interest in real estate. In other words, title insurance covers past title problems that come up after you buy or refinance a property. In the recording system, each time a land title transaction takes place, the parties record the transfer instrument with a local government recorder located in the jurisdiction where the land lies.

Undertaking this due diligence also protects the title company from liability down the line when they insure your title. In community property states, you may have to sign this documentation whether or not you’re on the title because you have certain legal ownership rights to the property as a spouse. This blog post will go over what a title company does and take you through the process.

The fact of the matter is, no matter how extensive and detailed the title check is, overlooks happen. A problem could arise at any point in time and if you’re not covered – you could end up in financial or legal trouble. To protect yourself from those kinds of situations and unpleasantries that come with it, you should consider title insurance. If you’re not familiar with it, we’re going to try and break it down and explain what title insurance is, why it is important and what you need to know about it.

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But the United States has never been prone to adopting the policies of its international counterparts, even when they’re demonstrably better. While it’s certainly unlikely any state would actually kill a private industry to form a state-run agency in the United States in the year 2018, it’s worth highlighting how much better Iowa’s state-run system is. That means 95 percent of their revenue goes toward operating expenses, which are minimal at least as they relate to insuring a title and paying claims, but end up rising and falling in lockstep with revenue.

Claims from others who might have rights to your property if a body of water (river, stream, lake, etc.) is on or near the property. Violating zoning or building ordinances related to land use, improvements, or environmental protection. Any defects created after the issuance of the policy, or defects that you create. © ChartAttack.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Title insurers woo real estate middlemen with lavish parties, tickets to sporting events, and in some cases direct kickbacks from title insurance agents for guiding homebuyers to their company. In fact, much of the premium from title insurance goes to kickbacks. The premium for the title insurance will be collected by your closing attorney along with all other expenses (such as your attorney’s fees for searching and providing an opinion on title) at the time of your closing. Title insurance is an insurance policy you buy from a title insurance company when you buy a home or property. It protects you and the lender from loss if a property ownership dispute occurs. Ask your real estate broker or mortgage broker for the names of a few title insurance companies or agents they have worked with in the past, not just one.

You can generally expect to pay anywhere from a few hundred to $2,000 for title insurance, according to the National Association of Independent Land Title Agents. The average cost of a lender’s and owner’s title insurance policy comes to $1,374 for a house priced at the national median value of $200,000. HOW TO SAVE ON TITLE INSURANCE. If title to the property was insured within the last few years, most title insurers will give a discount. The reason is they rely on the previous title insurer to have researched the title up to the date of prior title insurance issue.

You bought a house, but it turns out that the seller had an overdue bill on a previous home addition. Now there’s a mechanic’s lien on the property from several years ago that predates your mortgage. Without title insurance, you’d be held liable as the current homeowner. Closing costs usually encompass the fee of obtaining this important insurance, which is worth every penny. When purchasing a home there are some fees that may be worth arguing over but title insurance is not one of them. In addition to being expensive, some claims against a title, or title defects, can result in the home’s loss.

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The term of a title policy generally ends upon the sale, transfer or refinancing of the underlying property, which means that title insurers are unable to determine which and how many of its policies still are in force. This situation arises because the title insurer is not advised of the new policy, unless that insurer is fortunate enough to have written both the new and the old coverage. This feature provides for significant differences in the nature of claims and the reporting of financial information between the property/casualty business and that of the title insurer.

Still, if you take the time to shop for title insurance and escrow services you could find affording the things a new home owner needs a little easier. Embarking on the closing process can both be exciting and overwhelming for buyers. There are multiple parties are involved from the buyers & sellers, to the mortgage lender & title company.

To insure your title for the full amount of your purchase price, you also need to pay for buyer’s title insurance, and this costs about $150 more (for a $500,000 home). Alternatively, because title insurance has become so popular, some companies now only sell blanket policies that provide joint buyer and lender coverage. Lenders may be willing to offer a discount on your closing costs, whether you are buying a new property or refinancing the loan on your current home. In addition to shopping around for title insurance companies, remember to compare lenders as well. Your current bank or credit union, for example, may offer a loyalty discount on closing costs.

If you want to file a request for assistance against your title company or insurance company. What are the differences between a reverse mortgage and a home equity loan? With a second mortgage, or a home equity line of credit, borrowers must make monthly payments on the principal and interest.

Claims have been received which relate to forged deeds, forged releases of mortgages, fabricated or expired powers of attorney, undisclosed heirs, inadequate property descriptions and ineffective waivers. Other claims are made in response to a neighboring property owner’s assertion of a right to use the subject property in some fashion which is incompatible with the interests of the insured owner. No-fault insurance is when the insurance company indemnifies the policy holder for losses, regardless of fault in the incident.

So, for example, a property worth $100,000 would have a title insurance fee of $575, while a $200,000 piece of property would have a $1,075 title insurance cost. The cost of a title search in Florida is typically the seller’s responsibility and ranges anywhere from $150 to $1500, depending if it’s a residential or complex commercial title search and examination. The fee will be a separate line item on the Settlement Statement, which outlines all the related costs and specifies who pays which fees. If you’re wondering how much your title search will specifically cost in Broward County or the surrounding area, Title Partners of South Florida is more than happy to help you.

Title insurance only covers issues that date from before you took ownership of the home. If you don’t pay your property taxes or the government decides it wants to tear down your house and build a highway, you’re out of luck — the title insurance company won’t go to bat for you. Unlike traditional insurance companies where monthly payments are required, title insurance only requires a one-time payment. This insurance will vary according to the price on your home and according to the state that you will purchase a home. On average, a title insurance policy for a homeowner costs $834 and for the lender it will cost $544.

Bringing legal action at that late stage can be particularly expensive. Although title theft isn’t real, a forged deed or mortgage can have a very real — often devastating — impact on the owner. Since the forger’s name will appear on the land pacific life insurance records, the forger can sometimes deceive a third party into “buying” the property or a lender to take a “mortgage” of the nonexistent title. If the former owner bought the property within the last 10 years, they probably have a policy.

Clark’s brother worked as a lawyer in real estate title issues for many years. He would often tell Clark about disputes over property ownership and what rights the owner has. This is something where you as an innocent homeowner who is trying to buy or refinance a home, can end up being scammed. If the title company misses something and you have an owner’s policy, they WILL be liable. You don’t need to sue them for neglect, they should just simply pay the claim. But if you don’t have an owner’s policy, you have no claim against them even if there is a lender’s policy.

The studies admit that promulgated rate states have higher premiums than those states that allow free competition in rates, particularly the scheduled-rate states. However, I have seen no study that looked for the correlation between free competition and premium rates. It is not uncommon for a rate to change by 15% from one promulgation or filing date to the next. In Tennessee, some title insurers file one set of rates for Shelby County, another for Hamilton, Knox and Davidson counties, and a third set of rates for all other counties. Other title insurers have separate rates for Shelby, Hamilton, Knox, Davidson, Rutherford and Williamson counties. In Nevada, all or most title insurers file rates for two different zones, with Zone 1 being Clark, Lincoln and Nye counties and Zone 2 being all other counties.

The coverage amount is calculated on the greater of the sales price or loan amount. Enhanced coverage may be available to owner-occupants for an additional 10% of the applicable premium. The Non-Sale Rate applies when a loan policy is being issued in a refinance, subject to certain exceptions. In the case of a refinance, if you have an existing title insurance policy, you may be entitled to a reissue or refinance discount. Also, if the previous owner of the house can provide proof of an owner’s policy, the new owner may be eligible for a reissue discount on an owner’s and lender’s policy (from NAIC and Entitledirect.com). You will be charged for this lender policy as part of your closing costs and it will run you about $250.

If you live in a state that lets insurers set their own rates , you may find that quotes vary by hundreds of dollars. It’s a good idea to compare a few options to get the coverage you and your lender need without adding too much to your closing costs. After moving into an existing home, Max receives a notice from the municipality requiring him to obtain a building permit for a family room addition the previous owner built without a permit. Title insurance may cover the cost of demolition and the loss of property value or the cost of reconstruction. It protects against future discoveries about a property, some title-related and some non-title-related.

You may have the option to purchase additional endorsements with your policy. The loan rates and APR calculations also assume certain facts according to the type of loan described. First-time homebuyers often encounter new terms and concepts during the purchasing process. Homeowners’ Insurance Company Telephone Numbers Contact information for companies that sell homeowners insurance in Arizona. Once the preliminary report is issued the seller has a chance to review the report and challenge any of the findings. If there are any errors, the seller can demand that the errors be corrected and a new preliminary report issued.

Another good feature to look for is “legal services coverage”, which protects you if your lawyer makes a mistake during the buying process. With this coverage, your title insurer will rectify the error and reimburse you for any losses, thereby eliminating the hassle and cost of you suing your lawyer to recover any damages. The new owner will have to buy his or her own title insurance policies. That applies to lender’s title insurance as well as owner’s title insurance — even though lender’s title insurance protects only your mortgage company. It’s always the homeowner who pays, unless you’re lucky enough to live in a state where sellers traditionally cover the cost on your behalf.

Title insurance companies write these events off as business expenses, meaning taxpayers are picking up part of the tab. Some states have “rating bureaus” that influence rates, but the big four title insurers are often members of these rating bureaus. In other states, those companies control rates just by the sheer force of their market dominance. For decades, conservative dogma has preached that private enterprise is both cheaper and more efficient than a government entity. With title insurance, nothing could be further from the truth, as a handful of companies are forcing people to buy a largely unnecessary product for 20 times the cost. You may be able to purchase an enhanced owner’s policy, which includes more coverage than the standard level — but at a higher cost.

There are different types of title insurance, and understanding the differences is essential. If you haven’t already heard of title insurance, you will as you close on the mortgage for your first home. Title insurance protects against issues encompassing the ownership and the right to use and enjoy your property. If the property was bought or refinanced in the last five years, you may qualify for a short-term or reissue rate which can be anywhere from 5%-60% less. Be sure to ask for reissue rates, because your lender might not bring them up. It’s shady, but there’s much less commission to be earned on a cheaper insurance, so your officer may not bring it up.

Date: August 10, 2021