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Title Insurance is Not "Just Another Fee"

By
Title Insurance with AmeriTitle

 

Does the Cost and Complexity of Title Insurance Give You Pause for Thought?


You’re not Alone


Title insurance is often misunderstood by most consumers. In fact, a recent survey by the American Land Title Association revealed that most home buyers think of title insurance as “just another fee” they have to pay to buy a home. They don’t really know what it does, or how it protects them.


A major reason for this is that buying a home has become a rather complex process. There are so many details to take care of that most people rely on the person handling the sale to take care of them—typically their real estate agent. They trust their agent to know the process and do what is required, including ordering services like the appraisal, home inspection, and title work.


What is Title Insurance?


An Owner’s Policy of title insurance assures that the home you are buying is free of issues that could cloud the title to the property. Prior to issuing the insurance policy and before you close, the title professionals at AmeriTitle conduct an exhaustive search of the public record to check for liens, encumbrances, easements, and other problems that could affect the status of the title. If a problem is discovered, our title professionals make every effort to resolve them, or proactively notify you so that you can make an informed decision.


What are some typical problems that might cloud a title?

There may be a lien on the property for unpaid property taxes by the previous owner, or a mechanic’s lien by a subcontractor who performed work on the property and was never paid.  Other examples include a prior unpaid mortgage, or covenants and restrictions on the use of the property.


Paying Up Front so You Can Sleep Well Later


Title Insurance is based on loss prevention, which means a much larger percentage of the premium dollar is spent up front preventing title problems from occurring. These costs cover searching, identifying and resolving title issues before closing and eliminating risks that could result in a future claim. The truth is one out of every four residential real estate transactions has an issue with the title. Because of the due diligence performed before the policy is issued, these issues are often times resolved by AmeriTitle’s skilled professionals without the buyer even knowing.


A typical title search involves searching the public records, including visits to the offices of recorders or registers of deeds, clerks of courts and other officials, and AmeriTitle’s own title plants (going back to the original land patents in many of the counties we serve). Our title teams look for such things as judgments, forged deeds, releases, liens, undisclosed missing heirs, deeds by incompetent persons, falsification of public records, street and sewer system assessments, special taxes, levies, easements that affect the property, and numerous other matters. No other line of insurance does this level of due diligence before issuing a policy.


A One-Time Fee Protects You for as Long as You Own Your Home


The cost for Owner’s title insurance is a one-time fee, as opposed to other kinds of insurance that charge a monthly, quarterly or annual premium over the life of the policy. An Owner’s Policy of Title Insurance, which can be obtained in addition to a Loan Policy, remains in effect for as long as the policyholder (or their heirs) owns the property that is insured.  A claim could actually be filed 50 or 100 years after the policy was issued. And, an Owner’s Policy covers legal expenses involved in defending the title on behalf of the homeowner.


When you consider the size of the asset being protected, title insurance is probably the best value among the majority of costs associated with closing on a new home.

 

 

Comments (4)

Robert Bob Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX ( West of Houston) Real Estate Expert

Yes you are correct most folks do not understand title insurance. Of course it does not help when a client actually reads the policy and sees all of the items that are excluded from coverage. Several folks have asked me "Well what is covered"...

May 17, 2011 09:22 AM
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Rosi, so many buyers really do not understand title insurance at all. You really made it easy to understand here.

May 17, 2011 10:05 AM
Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

Considering the protection that a title policy provides the cost of acquiring one and the peace of mind that comes with it makes it a no brainer.

May 17, 2011 10:12 AM
Rosi Green
AmeriTitle - Silverton, OR

Thanks for the comments!  Our title and escrow group works very hard to make sure that new owner holds clear title.  It may sound boring but we're having fun and passionate about what we do. 

May 18, 2011 04:18 AM