This is my first post on Active Rain as a member of Stewart Title, so I thought I would start with something basic: the uniqueness of title insurance.
Title insurance is, to my knowledge, the only insurance product which does not insure a contingency. We buy health insurance because we might get sick. We purchase homeowners' insurance because our house might burn down. We get auto insurance becuase we might get in an accident. Even though death is a certainty, life insurance is a contingent product as well, because the timing and circumstances of our demise is (hopefully) unknown. And we pay monthly premiums for these products because each month represents another increment of future risk.
Not so, title insurance. When an order is placed with a title company (Stewart, for example), the property records are searched from the creation of a parcel of land as a recognizable property up until the present time. Ownership is researched from the original treaty or land grant and examined from person to person, creating the "chain of title." Easements, encroachments and liens are scrutinized. When the transaction is closed, the policy covers the owner or lender to ensure title and proper use of the property up until that closing. Because that is a definable block of time- and because the risk can be measured in the past, not the future- the premium is a one-time fee, good for the length of ownership or the loan.
Of course there is risk, or title insurance would not be necessary. The thorough search and examination of property records requires training, experience and expertise. In this, title insurance is unique as well, since the real work performed by companies such as Stewart is to prevent the possibility of a claim, not to deal with crises after they've already occurred.
Thank you for reading this- I look forward to being on Active Rain!
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