Finding the Best Title Insurance Rates

From the Superpages.com

Shopping for title insurance rates can be an exasperating issue at best. The options that are available to you depend on where the home you are purchasing is located.

What is Title Insurance?

With as little legalese as possible, title insurance is a policy that insures against damages and problems that arise due to issues surrounding the ownership of a piece of real property, or from any liens that have been placed against it. It guarantees that the property is clear of these problems and the titleholder is free to sell or deed the property. The title insurance company is obligated to either correct any problems or pay the titleholder for any damages. The policy lasts as long as the owner (or the owner’s heirs) holds the deed to the property.

Two Types of Insurance

There are two kinds of title insurance policies: an Owner’s policy and a Loan Policy. The Loan policy is required by lenders to protect the investment they are making. The purpose of the Owner policy is to protect the interests of the owner. In most states, this is an optional purchase, and the regulations vary as to who buys this product. A title company can tell you the requirements for your area.

Shopping for the Best Rates

Here is where things get sticky. In some states (Texas, New Mexico, and Florida), title insurance rates are established by their State Department of Insurance. Because of that, it is a waste of time to look around for better rates. In those states with rating bureaus, there may be uniform rates also. The best way to find out what the policies are in your state is to contact a local title company and ask how the rates are determined in that state.

Regardless of how the rates are set in each state, the consumer does have some flexibility in finding the best deal for the price. The services provided by title companies are consistent, not the least of which are conducting the title search, preparing documents, getting them notarized, and conducting the closing. However, each state may have different rules governing what services a title company is required to provide and what services can be assessed an additional fee. When seeking a title company, ask what services they perform for the fee they charge.

Whether a state board sets title insurance rates, or title companies are free to establish their own rates, the borrower is not limited to the title company recommended by the real estate agent. If desired, the borrower can procure the services of any licensed title company. Getting the best rate for your investment involves asking a few questions and making a few telephone calls.