Title Insurance

Asked by Da, Allen, TX Wed Jan 14, 2009

I am in the process of buying from a widower and not sure what are all the things that are covered by the Title Insurance. What happens if I buy the house for $300K and title insurance covers up to $300K. And later on I put in a pool for $50K and then someone claims the property. While the title insurance should cover up to $300K, what happens to the other $50K. Ultimately, I will hire a real estate attorney but would like to get some feedback from others as well.

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Patrick Jack…, Agent, McKinney, TX
Wed Jan 14, 2009
Title insurance covers only the amount of the sales price of the property under the conditions of the Title Commitment. There are usually some minor exclusions to the coverage which will be noted in the commitment. The title company will often remove some exclusions for an additional fee. The title policy does not cover the value of the new pool or added value when the market goes up and your property value goes up to $400,000. However, the insurance underwriter is not in business to pay out claims so they will aggressively defend the title on your behalf. The title company researches the property on behalf of the insurance underwriter to assure that there are minimal claims. I put your question to an escrow officer that I work with on a regular basis. To give me an idea of the risk involved, the escrow officer compared title insurance risk to property insurance risk. Where a property insurance company may figure that 40 to 50% of their premium goes to losses, a title insurance company pays only 10% of their premium to losses. Half of that amount is for errors made in documents or tax proration that results in minor payments, not surrender of the property. Title insurance companies are in a position to prevent their own losses and therefore your risk of loss is minimized.
2 votes
Bill Eckler, Agent, Venice, FL
Fri Jan 16, 2009

Are you working with a realtor? They should be able to guide you through gaining a better understanding of the Title process and what Title Insurance is all about.

Consult your agent.
0 votes
Viktor Taush…, Agent, Dallas, TX
Thu Jan 15, 2009
So Patrik gave you the right answer.
0 votes
Vicki Masell…, Agent, Duluth, GA
Wed Jan 14, 2009
I believe Patrick's answer best sums it up. You do realize that there are basically 2 types: Owner's Title Insurance and Lender's Title Insurance, right? I assume your question is related to purchasing owner's title insurance. If this particular topic is of concern, you can never go wrong seeking sound legal advice from a real estate attorney. They work with title companies all the time and should have an excellent handle on the terms of such policies.
0 votes
Dallas Texas, Agent, Dallas, TN
Wed Jan 14, 2009
You can hire a real estate attorney HOWEVER you can have a real estate agent covered under their e & o insurance. If you put a pool in that is not covered under title insurance . Title insurance is only coverage stating property can be passed to you w/o any liens on property. Notify title company she is a widow that are no other family member could have claim on property. If she misrepresents the truth widower could be sued not you they falisfy info.

If I can assist you contact my office
Web Reference:  http://www.lynn911.com
0 votes
Scott Godzyk, Agent, Manchester, NH
Wed Jan 14, 2009
The title insurance will assit in clearing the title for you. If someone makes a claim to the property, they pay for the attornies to fight on your behalf, they dont just fork over $300,000 . In most cases with title problems you see a mortgage payoff/release not filed, a death certificate not filed, a former sales not recorded. That is why they do a title search prior to attempt to find these. If it is clear they issue the clear to close and a title policy for the lender and for your protection if you choose whoch is the best insurance you can purchase. good luck with your purchase.
Web Reference:  http://www.ScottSellsNH.com
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