Six Common Misconceptions About Title Insurance

July 3, 2013
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title-insurance-faq-new-york-expert-title-insurance-costsCompared to the various types of insurance policies out there, like life insurance, car insurance, or health insurance, not very many people know about title insurance.  Title insurance is a type of insurance policy that if you ever own your own property, you will be required to purchase.

There are a number of misconceptions about title insurance and the good folks over at Expert Title Insurance Company are here to clear up some of these common misconceptions.

Common Misconception #1: Title insurance only covers the bank (or lender).  Yes and no.  There are two types of title insurance policies.  One is a policy known as a “Loan Policy” which is a title insurance policy which covers the lender.  The other is an “Owner’s Policy”, which is a separate policy that needs to be purchased which insures the buyer.  The Loan Policy is required when you purchase a home (or other property) and its premium is typically included amongst many of the other expenses and costs associated in the purchase.  The buyer is not, however, required to purchase an Owner’s Policy, although it is highly recommended to do so.

Common Misconception #2: If I refinance, I don’t need to get a new title insurance policy.  As the buyer, you will not need to get a new insurance policy if you refinance your loan. Once you purchase an Owner’s Policy, you and your heirs will be protected as long as you have an interest in the property.  However, when you refinance a loan, you are getting a brand new loan and the lender will require you to purchase a new Loan Policy when refinancing.

Common Misconception #3: Title insurance will protect the value of my home. Title insurance only helps in the event that there’s a claim that comes up against the title of the home.  It doesn’t prevent the loss of marketability of the property due to a title claim.  If a claim arises, you will most likely not be able to sell your home until the claim is settled.

Common Misconception #4: I have to go with the title insurance company my escrow company and bank use.  This is simply not true and is probably one of the biggest misconceptions people have about title insurance.  You, as the buyer of property, have the right and option to seek out and research the wide variety of insurance carriers to write your title insurance policy.  While it may seem convenient that the lender or the escrow companies already have an insurance agency that they work with, keep in mind that they are not always looking out for your best interest.  Many lenders may work with title insurance companies that do not have the best rates available and may have their own financial interests in mind.

Common Misconception #5: Title insurance is expensive.  Premiums for a title insurance policy are calculated differently based on where you’re located and some regions the policy covers certain costs and in other regions, it does not.  Unlike other types of insurance, title insurance has a one-time premium that is paid at the time of closing escrow and is typically calculated as a percentage of the price of the property.  This rate varies and your title insurance agency should have this available to you before purchasing a policy so that you can make an educated decision when choosing a title insurance company.  Keep in mind that while title insurance helps protect you from the “what ifs” against the title of your property, it will be far less expensive to you to get the policy than to pay out the attorney fees and court costs associated with defending your property’s title should a claim arise against your property.

Common Misconception #6:  I don’t need title insurance. Whether you need title insurance or not, your lender will make sure that they are covered in the event that a claim comes up against the title of your home or property.  You don’t “need” to purchase an Owner’s Policy, but given the fact that your home may be one of your most valuable assets, it would be wise to spend the extra money upfront to pay the one-time premium to help with the costs associated in case something does come up.  The cost involved in defending your property’s title if something does come up isn’t just limited to attorney fees or court costs, but there’s also the costs associated should you have to sell your property, find another home, move somewhere else, etc.

If you are looking to buy a home or want coverage to help you protect any real property you may currently own from any title claims in the future, contact Expert Title Insurance Company today to get a quote.  Like many things in life, title insurance is one of those things you don’t realize you need until it’s too late!  So, contact Expert Title Insurance today!

This post has been brought to you by the good folks at Expert Title Insurance Agency, LLC.  Expert Title Insurance is one of the leading title insurance companies for both residential and commercial real estate.  Based out of New York City, Expert Title Insurance has helped provide numerous real estate owners and homeowners looking to refinance their home loans competitive rates and the best customer service available.  Contact Expert Title Insurance today for your free quote. We would love to have you follow us on Facebook.

Photo Credit: jannoon028 via freedigitalphotos.net

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One Response to Six Common Misconceptions About Title Insurance

  1. Astrid on August 6, 2013 at 2:06 pm

    Excellent blog post. I absolutely appreciate this website. Continue the good work!

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