Have a query or 3 on your title insurance that requires quick feedback...

Single amount based on value covered at so much per unit value. Different companies have different rates in different locations. Some have a minimum cost despite actual amount covered.

One I have handy shows a $300 charge for a $32,000 policy.

I have never heard of anything but single premium.

very few people Want title insurance, but wise lenders demand it.
so, almost all only get Lenders Insurance, not knowing anything else. The policy pays the Lender for losses, not more than the loan amount, and when the mortgage gets paid off it is Gone. Most properties turn over or get refinanced quickly, 4 or 5 years, so it usually turns out to be rather short term.
another policy, the Owners Policy, is also single premium, but lives for the life of the ownership. It is sold separately, but as an add-on to a purchase or refi time Lenders Policy it is usually quite inexpensive, less than 10% extra. The last time I bought property in the US I asked for an Owners Policy for the full purchase price (more than double the loan amount). The title company agent disappeared for a while, made some calls, and returned with a price.

Peter Ehlert, post: 376516, member: 60 wrote: I have never heard of anything but single premium.

very few people Want title insurance, but wise lenders demand it.
so, almost all only get Lenders Insurance, not knowing anything else. The policy pays the Lender for losses, not more than the loan amount, and when the mortgage gets paid off it is Gone. Most properties turn over or get refinanced quickly, 4 or 5 years, so it usually turns out to be rather short term.
another policy, the Owners Policy, is also single premium, but lives for the life of the ownership. It is sold separately, but as an add-on to a purchase or refi time Lenders Policy it is usually quite inexpensive, less than 10% extra. The last time I bought property in the US I asked for an Owners Policy for the full purchase price (more than double the loan amount). The title company agent disappeared for a while, made some calls, and returned with a price.

Peter if you purchased Owners Policy on a property sold for say $400,000 you would pay a one off fee as a percentage of property value? Would the percentage vary with the reliability of ownership and existing survey data? What a rule of thumb be 0.1%

Radu I've had only a couple of instances here (Tas) and I never learned final outcome.
But I understand it was about $300-400 for a one-off fee.
I had a solicitor I know well who rang and asked for an idea of an ident survey.
I knew the area well, very recent subdivision, excellent aerial photography, not Google, and it was obvious there was encroachment of improvements onto the neighbouring Crown land.
It would have been dead easy to check on ground from original survey.
I think I suggested $600 to check and report.
They declined favouring Title Insurance.
Solicitor wasn't impressed and whilst I didn't need a job, I felt ticked off for their attitude.
If I was the insurers I'd not give them a bean.

Is TI common over yonder?

RADU, post: 376683, member: 222 wrote: Peter if you purchased Owners Policy on a property sold for say $400,000 you would pay a one off fee as a percentage of property value? Would the percentage vary with the reliability of ownership and existing survey data? What a rule of thumb be 0.1%

I have no idea how fees are set, I don't think survey data is a factor at all... this is a Title thing, not location.
Premiums are probably more like 1% of policy value. Owners policy is in addition to the regular Lenders policy... perhaps 5% or 10% extra.

Peter what do you mean by "Title thing"?
I assumed for here it was to do with boundary locations and straying buildings across such.
Our Title system is pretty secure here. But once, in the bad old days, under what we call " General Law" the issue there would also involve "other owners" laying claim to same piece of land or part thereof,
That just doesn't happen here since converting to the current "Real Property System" or Torrens Title.
That was a real problem with Old System = General Law that one needed to research back through old Conveyances or Deeds to check lineage of ownership and any stray subdivisions that might have crept in.
That probably helps me understand better and probably has been introduced into Australia by someone completely ignorant of our title system.
Sort of following the USA or as they say here "All the way with LBJ".

Am I right in assuming your deeds, conveyances could lead to multiple or at least double claim to same piece or pieces of ground? In some circumstances ie.
Hence Title Insurance. Latter pays to sort out any messes.
Not dispute over where neighbours boundaries sit.

04:47 AM need.coffee

9:50 pm. As much as I'd love a cappuccino right now , sleep deprivation is not an option I need right now.
That stuff (proper stuff) puts fire in the boilers!

Richard, post: 376698, member: 833 wrote: 9:50 pm. As much as I'd love a cappuccino right now , sleep deprivation is not an option I need right now.
That stuff (proper stuff) puts fire in the boilers!

Title insurance premiums are based on fairly complex actuarial studies and computations. A basic policy in the U.S. has become a requirement of most lenders. It covers the lender only. It does not cover any issues a survey would turn up, unless a survey is provided, in which case they will remove the survey exception.

In practice, the lenders seek out something less than a survey (sometimes referred to as an inspection), or an owners affidavit that nothing has changed since the last survey. Either of these might also lead them to remove the survey exception. Again, based on actuarial studies to determine cost v risk.

So, the consumer pays for the lenders title insurance and the less than a survey, many times thinking they have purchased their own title insurance and a real survey. But, these policies are necessary to reduce closing costs and make homes more affordable under Federal law; at least to do so without reducing the cut of other stakeholders in the pool of money available in closing costs. Many times the lender and title company are owned by the same parent company.

At the end of all this there are occasional problems. But usually they can be relegated to exceptions so that title insurance rarely pays out according to published statistics. One of the most lucrative insurance markets in the U.S.; and that's saying something. Nevertheless, it's good risk management to have it, especially on high dollar transactions, because it does sometimes save from major investment losses.

When I opened a 30k line of credit on our home it cost me 150 for the required title insurance for lender, another 300 for an owners policy, about 7 years ago. Had to sign a paper acknowledging I had been informed the lender and insurance company were affiliated, said I could shop around if I wanted to. And they really tried to discourage me from getting the owners policy for some reason. And also had to sign the affidavit of no change; the survey had been performed by me in the field when working for a surveyor before I was licensed.

Quite a game. In one case I performed a survey that showed lake lot deeds needed correction to indicate appropriate lot numbers. Title insurance refused to pay and after 6-8 years finally found a surveyor who would show the lots as they wanted them. So they called it a survey problem and the lots in question did not have the survey exception removed so landowners had to pay costs. Nobody ever contacted me to say there was a survey disagreeing with mine, I found out through the grapevine. In another case I confirmed a landowners claim that a previous survey was incorrect and the title company did pay out a little bit for loss of frontage. And in a few cases my surveys have saved the title company from paying claims.

So yeah, there's plenty of confusion out there in the U.S., which is the reason for title insurance. Before the 1990's attorneys would give title opinions based on the abstract and a real survey, but they found it was just too risky. Although, I believe the State of Iowa still does not allow title insurance. And some of our States have extensive Torrens type title registration systems as well; MA and MN come to mind.

Richard, post: 376694, member: 833 wrote: Peter what do you mean by "Title thing"?
I assumed for here it was to do with boundary locations and straying buildings across such.
Our Title system is pretty secure here. But once, in the bad old days, under what we call " General Law" the issue there would also involve "other owners" laying claim to same piece of land or part thereof,
That just doesn't happen here since converting to the current "Real Property System" or Torrens Title.
That was a real problem with Old System = General Law that one needed to research back through old Conveyances or Deeds to check lineage of ownership and any stray subdivisions that might have crept in.
That probably helps me understand better and probably has been introduced into Australia by someone completely ignorant of our title system.
Sort of following the USA or as they say here "All the way with LBJ".

Am I right in assuming your deeds, conveyances could lead to multiple or at least double claim to same piece or pieces of ground? In some circumstances ie.
Hence Title Insurance. Latter pays to sort out any messes.
Not dispute over where neighbours boundaries sit.

EDIT: ^^what he said^^
ahh... You are thinking of the infamous ALTA survey and the companion Title Policy referring to it. Different animal.
depending on the Table A options it can very detailed, or not.
ALTAs are unheard of for noncommercial property. Big industry, fast turnaround required.

Insurance. This is all Title Insurance: ownership, liens, easements (matters of record). Just $ compensation if they miss something in the title search and did not tell you about it in their disclaimers.
The Insurance Company decides what their risk is, defines what they will pay, then they decide how much $ they want for that risk.
kinda like going to the casino.

more.coffee.now

Many thanks Peter and Duane. Most interesting. Filled in my ignorance nicely.
And makes sense.
We have extensive searches for all manner of things, (to do with property, titles, covenants and zoning issues, utility services etc) much of which you can for a fee, download.
Actually pretty well organised in that department.
Now I can hit the cot, in peace and with no coffee.

PS:
Duane Frymire is a true expert, I am a country boy.
He works in the East, quickie surveys are often performed for sales. I did a bunch in Oregon a few decades back... 3 or 4 a day per crew.
In the West a field survey or inspection of any kind for residential sales is rare. Not a Lender requirement, the policies specifically exclude "anything a field survey might disclose". To get That exception removed you move to the ALTA Survey.

Peter Ehlert, post: 376709, member: 60 wrote: PS:
Duane Frymire is a true expert, I am a country boy.
He works in the East, quickie surveys are often performed for sales. I did a bunch in Oregon a few decades back... 3 or 4 a day per crew.
In the West a field survey or inspection of any kind for residential sales is rare. Not a Lender requirement, the policies specifically exclude "anything a field survey might disclose". To get That exception removed you move to the ALTA Survey.

For commercial stuff they usually want an ALTA survey, or at least that has been the practice. However, even there things might be changing. A few years ago someone called my office asking for an inspection of a previous ALTA. Took me a bit to figure out what they were asking, but sure enough it was an ALTA ILC/plot plan or something. I sent them elsewhere. Way too much liability for me, but I'm sure they found someone.

Richard, post: 376707, member: 833 wrote: Many thanks Peter and Duane. Most interesting. Filled in my ignorance nicely.
And makes sense.
We have extensive searches for all manner of things, (to do with property, titles, covenants and zoning issues, utility services etc) much of which you can for a fee, download.
Actually pretty well organised in that department.
Now I can hit the cot, in peace and with no coffee.

My daughter is in Hawaii and I think their system is similar to yours.

Off Point: Here in Mexico the transfer process is very anal. Very. Probably somewhat similar also.
The full deed registration process is controlled by select Attorneys, with extra training and powers (their title is Notario but not nearly the same as a US Notary). Their review and approval includes everything under the sun. The Registered title is never questioned.
(tid bit... Notarios are required to collect transfer taxes (often 20 or 30% of the sales price [ouch!]) they are personally liable if they come up short)