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Vahomeowner, Home Buyer in Williston, VT

Does anyone have an opinion on the need for owners title insurance who is NOT an insurance agent?

Asked by Vahomeowner, Williston, VT Tue Dec 21, 2010

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Title insurance is required by the lender. It protects the lender from any possible claims on the title prior to funding the loan. The insurance is only required up to the loan amount and not the purchase price, If a claim is made and the claimant is in the right, the lender would get all of its money back from the insurance company. Unless you purchased insurance up to the purchase price, you would lose your downpayment.

Considering there are few claims on title and very little paid out to claimants it is nothing more than a way for attorneys to make money.

I hope that info was usefull :)

I am a mortgage Originator in VT and if I can ever help give me a call!


Thanks

Ryan
0 votes Thank Flag Link Tue Dec 21, 2010
VT Homeowner, if you don't like the service here, you still don't have to pay for it.
1 vote Thank Flag Link Wed Dec 22, 2010
Hi Vahomeowner,

You may be confused to the disignation of "agent" in the profile, I for instance am a Realtor, not an insurance agent. I believe most people who answered you are also Real Estate Agents.

We all have much varied life experience, that are graciously sharing with you.

Good luck in your search.

Ray Garcia
rghomes@gmail.com
617-942-0447
1 vote Thank Flag Link Wed Dec 22, 2010
There are many times that we have insurance to cover us for things that we don't use, and this is most likely another one of those things, however, you never know. If you buy a lender policy only, then you equity is not covered. You will only buy your owner's coverage once, and will not need to purchase it again if you refinance, you will then only need a new lende's policy. Although you may never actually get money out of a title company, what is important about having that policy is that if satisfactions on previous mortgages are not filed properly, you r owner's policy willrotect you to get those items cleared.
0 votes Thank Flag Link Sun Dec 26, 2010
I am a Real Estate Agent/Bropker NOT an Ins. agent. My answer below (approx:11th down) gives you the basics and you may click on the Link to read a bit more...

Lee Goade
Reliant Realty
Hendersonville, TN
0 votes Thank Flag Link Sun Dec 26, 2010
This person does raise a good point - why are TI companies so profitable?

I can think of one - unlike other insurance providers, TI companies can actually control the risk. They do this by performing their own title searches or maintaining their own databases. Your auto company cannot control your driving, but a TI company can essentially make the bet that they've done a good job in solidifying the chain of title.
0 votes Thank Flag Link Wed Dec 22, 2010
Also, in Arizona, typically an attorney is not even involved. The title company closes the transactions and the buyer and seller have a Realtor helping them through the process.
0 votes Thank Flag Link Wed Dec 22, 2010
I am a Realtor and have been for over 20 years. Your lender will require title insurance, but if you are paying cash it is your decision.

My opinion; I would pay for it and have on every home I have purchased. Even our investment purchases.

Best Regards,

Brenda
0 votes Thank Flag Link Wed Dec 22, 2010
Compare title insurance TO ANY OTHER TYPE OF POLICY... how often do you EVE file a claim ? Most of time zero... how it always best to have it.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Wed Dec 22, 2010
I was asking for the opinion of people who are NOT insurance agents, and what do I get??? Mostly insurance agents telling me what I already expected to hear!!!! What is the percentage of claims to policies taken out. I am reading on the internet that these owners title insurance premiums are 95% profit for the lawyers. Does anyone have facts to dispute this?
0 votes Thank Flag Link Wed Dec 22, 2010
Title terms you need to know
What is a title? What is title insurance? What is a title company? Many people are asking these questions and it is coming up even more frequently with the foreclosure mess. Here is a list of definitions taken from Financial Real Estate Handbook Sixth Edition.

• Title - the evidence one has of right to possession of land.

• Title Company - an agency issuing the policy of a title insurance company.

• Title Insurance Company - A company which issues insurance regarding title to real property.

• Title Insurance - Insurance against loss resulting from defects of title to a specifically described parcel of real property.

• Title Order - An order for the search of a title to some parcel of property, eventually leading to the issuance of a policy of title insurance.

• Title Plant - A filing of all recorded information to real property, paralleling the records of the county recorder's office, although the filing system may be different.

• Title Search - A review of all recorded documents affecting a specific piece of property to determine the present condition of title.

• Defective Title - Title to real property which lacks some of the elements necessary to transfer good title.

• Preliminary Title Report - A report showing condition of title before a sale or loan transaction. After a completion of the transaction, a title insurance policy is issued.

When you have questions related to title, ask a real estate attorney or title company.

Tammy Hayes, Realtor, Sandals Realty, Punta Gorda, FL tammyhayesre@gmail.com
0 votes Thank Flag Link Wed Dec 22, 2010
Hi Vahomeowner,

As a former life insurance agent, I can tell you that nobody wants the coverage untill it's too late...yes, you may never need the coverage, and IF nothing goes wrong, then your gamble pays off. IF on the other hand you do need the coverage, you'll be patting yourself in the back as the smartest businessman around!

Ray Garcia
(o)781837-2877
(c)617-942-0447
rgarcia@jackconway.com
0 votes Thank Flag Link Wed Dec 22, 2010
Yes. Title Insurance is the "warranty" in a warranty deed. Without it, your warrant (guarantee) - no offense - has no value. Let's say I take your deed, there's a title problem, you've left the scene - who's going to make me whole? The title insurance company.
0 votes Thank Flag Link Tue Dec 21, 2010
Not sure if I fully understand your question. But, Title Ins. protects the person or lending institutions vested interest in the property. It guarantees a Clear and equitable title. ( protects the Buyer/Lending institution against defects or Liens previously filed against the property prior to transfer).

If you use a Lender it will be required. If you are paying cash and financing yourself, you should require yourself to purchase it!

See below link for a more in depth explanation...

Hope this helps!
0 votes Thank Flag Link Tue Dec 21, 2010
Actually title insurance provides peace of mind in knowing that the property you purchased is a safe investment--should any title defect(s) appear that could not be discovered in the public search, the insurance will rectify the issue(s) at no additional costs...it does protect your investment and is probably the best insurance you can buy.
0 votes Thank Flag Link Tue Dec 21, 2010
Assuming you don't have a loan and so there is no lender requiring title insurance you may be asking if its worth it. Only you can decide that. As Ryan said below there are very little suits over title issues, but they do come up now and then mostly on new construction in my experience. If you are purchasing a property that has been around for many years with different owners and not much has changed I doubt there is a red flag there. Any encroachment issues are dealt with from a survey and the only title issues are odd things like the husband sold it unbeknownst to the wife or the new wife signed and not the old wife or stuff like that. I have had a title issue with ownership of a pondfront home but that was many years ago. It's a one time insurance policy for as long as you own the property, it might help you sleep better but its your call.
0 votes Thank Flag Link Tue Dec 21, 2010
I am not an insurance agent, but I'll give you an explanation of Owners and Lenders Title Insurance.
First of all, Title insurance insures either the lender or the owner against any claims arising from title issues down the road. Let’s say that the seller sells you his home. The title company performs the title search and comes back clean. Well, find out five years down the road that there was another owner in joint for that property. Say a wife or kin or anyone. They didn't want to sell the property, but the title company didn't catch that. Legally, you would no longer own that property. The seller never had a fully marketable title. Therefore, since the title company did the search the insurance policy will be responsible for compensating you and the lender if you have title insurance. If you didn't purchase an owner’s policy, you would receive no compensation and would not own the property any longer. The lender, however, because they had you purchase a policy, would be compensated. Lender Policy - insures lender, Owners Policy - Insures you.
This is a very simplified explanation and I have to admit that this is very unlikely. I have tried to use a very simple example. There are literally hundreds of thousands of ways that your title insurance would come in handy. It doesn't always have to be this cut and dry. Title issues can be very complicated and it worth the extra money to make sure you are covered in the future. It's kind of like paying someone huge sums of cash and forgetting to get a receipt. It's a good idea to have proof that you do actually own the property you paid for at closing. Hope this helps!
Your title insurance owner's policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title insurance company's responsibilities should any claim covered by the policy terms arise. Typically your title insurance will protect you from loss:

if someone contests your title in legal action (the title insurance company will defend the title at no expense to you),

or if there is a title defect that cannot be eliminated (the title insurance company will protect you from financial loss - up to the amount of the policy).
0 votes Thank Flag Link Tue Dec 21, 2010
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