Ask These Questions About Homeowner Title Insurance
Title insurance is an important part of your real estate transaction. Lenders require the buyer to purchase it to cover the lender, should there be possible defects or problems with the title when ownership is conveyed.
But buyers? They have the option to purchase it for the same reasons, possible fraud, deed forgery, unpaid contractor liens, taxes, and more.
Before you buy homeowner's title insurance, here are 5 important questions to ask.
But buyers? They have the option to purchase it for the same reasons, possible fraud, deed forgery, unpaid contractor liens, taxes, and more.
Before you buy homeowner's title insurance, here are 5 important questions to ask.
How the Process Works to Get Title Insurance
Before you can ask the questions, you need to understand how the issuance of homeowner's title insurance works.
In a nutshell, it's a two-part process. Either the title insurance company or the attorney performs a records research to make sure there are no undisclosed heirs to the property, no pending litigation, errors, unpaid taxes, and so forth.
Then a homeowner's title insurance is issued when the title company contracts with an underwriting company to issue the policy. The underwriting company will pay for your defense should a challenge arise to your estate. And if you lose, they are the ones that will compensate you for your equity.
That's how the process works. And here are the questions to ask before you purchase title insurance for your home.
1. "Are Prices Regulated with Title Insurance Companies?"
In a lot of states, you'll find there isn't much price difference between companies. But price isn't the only consideration. You want to look at two factors:
Your goal is to find a title company or attorney that does a thorough search. Additionally, you want an underwriter with a strong reputation, one that's been around for at least 10-15 years. That's further insurance for you, if there's a problem.
2. "How Much Coverage Do I Really Need?"
The short answer is, that depends! Typically, an owner's policy protects agains numerous contingencies like undisclosed heirs, spousal claims, forgery, and fraud.
Depending on the circumstances surrounding the deed, you may choose to have additional coverage. For example, if the construction of your new home somehow violates the restrictions in the subdivision, a restriction endorsement could protect you.
In a nutshell, it's a two-part process. Either the title insurance company or the attorney performs a records research to make sure there are no undisclosed heirs to the property, no pending litigation, errors, unpaid taxes, and so forth.
Then a homeowner's title insurance is issued when the title company contracts with an underwriting company to issue the policy. The underwriting company will pay for your defense should a challenge arise to your estate. And if you lose, they are the ones that will compensate you for your equity.
That's how the process works. And here are the questions to ask before you purchase title insurance for your home.
1. "Are Prices Regulated with Title Insurance Companies?"
In a lot of states, you'll find there isn't much price difference between companies. But price isn't the only consideration. You want to look at two factors:
- The quality of the title search
- The quality of the company
Your goal is to find a title company or attorney that does a thorough search. Additionally, you want an underwriter with a strong reputation, one that's been around for at least 10-15 years. That's further insurance for you, if there's a problem.
2. "How Much Coverage Do I Really Need?"
The short answer is, that depends! Typically, an owner's policy protects agains numerous contingencies like undisclosed heirs, spousal claims, forgery, and fraud.
Depending on the circumstances surrounding the deed, you may choose to have additional coverage. For example, if the construction of your new home somehow violates the restrictions in the subdivision, a restriction endorsement could protect you.
3. "Who's Responsible for Paying for Title Insurance?"
Here in Staunton, VA, the buyer is responsible for paying for both policies, the lender's and their own homeowner's policy. But that's not true for all states; it varies.
4. "Who Decides on the Title Insurance Company?"
You do! You are paying for the service, so you select the company you want to work with.
5. "How Much Reassurance Do I Need When Buying Coverage?"
While insurance companies and banks aren't supposed to go out of business, it does happen. Verify that the underwriter issuing your policy is sound. You can check its financial solvency with rating companies like Demotech Inc, A.M. Best Company, and Fitch Ratings.
Check reviews online of the title company you're working with. Find out what your neighbors have to say about them. You can also contact your underwriter directly to get a copy of your policy.
Lilly Title & Settlement is a woman-owned company serving Staunton, Waynesboro, and Augusta County. Learn more about us at: https://www.lillytitle.com.
Here in Staunton, VA, the buyer is responsible for paying for both policies, the lender's and their own homeowner's policy. But that's not true for all states; it varies.
4. "Who Decides on the Title Insurance Company?"
You do! You are paying for the service, so you select the company you want to work with.
5. "How Much Reassurance Do I Need When Buying Coverage?"
While insurance companies and banks aren't supposed to go out of business, it does happen. Verify that the underwriter issuing your policy is sound. You can check its financial solvency with rating companies like Demotech Inc, A.M. Best Company, and Fitch Ratings.
Check reviews online of the title company you're working with. Find out what your neighbors have to say about them. You can also contact your underwriter directly to get a copy of your policy.
Lilly Title & Settlement is a woman-owned company serving Staunton, Waynesboro, and Augusta County. Learn more about us at: https://www.lillytitle.com.
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