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)

As mentioned above, silly landowners tend to ignore purchasing title insurance unless there is a lender involved who dictates the purchase of a lender's policy. Another thing they tend to ignore is the fact that the value of the policy is fixed. Say a homeowner buys a fixer-upper, as we call them, for $100,000 and borrows $80,000. The lender gets a policy for $80,000. If the homeowners are smart they will pay a small additional fee to obtain a homeowner's policy for at least the $80,000 amount. If they are really smart they will pay a bit more to up their policy amount to the full $100,000. Where they create the potential for a problem is when they make major improvements to the property such that it might be able to be sold for $200,000, if there are no title problems. When they go to sell, the new title search turns up a big problem somehow overlooked previously. The opportunity to collect damages is proven................to everyone except the company where they purchased their policy. They will fight for months to avoid making any payment at all or a very small payment relative to the $100,000. But, in the rare case they pay up, it will still only be for the $100,000. Therefore, homeowners need to purchase additional insurance as they can prove an additional value of the property insured, not just a pipedream amount, as the title insurance company will not go for that.

The title insurance companies have employees analyze the chain of title to locate potential concerns. On occasion, the employee will not notice something critical. The more common concern is that most companies have set up internal standards for just how far back to search the chain of title for possible title issues. They do this based on actuarial experience. They gamble that nothing, or very little, will ever arise from anything that happened further than that into the past. For example, they may only study the chain of title for the most recent 40 years. Had they dug deeper they may have found that one of the owners way back in 1952 was listed as Missing In Action during the Korean War. One day the old boy comes home from Korea, very much alive, to discover that what he owned in 1952 was sold without his knowledge or approval.

An example of another problem that can arise is a case of a deed being filed by Jack Jones conveying his interest to Hank Snow. Many years later, Mrs. Jack Jones appears to claim her interest in the property that she didn't even realize she owned because her husband never told her he bought it prior to reselling it to Hank Snow. Her interest needed to be covered on the deed to Hank Snow. The title worker should have inspected the deed to discover that it did not read, "Jack Jones, a single person". All it said was "Jack Jones". That is not good enough.

the liquid assets if the Insurance Company is important, their ability to pay a claim may be quite limited. I believe that is only controlled by State law, and some may not be comprehensive.

when I think of Insurance the image of this guy flashes into my head.

From an earlier post on this subject:

"At a recent surveyors dinner meeting we were being entertained by a Gary Kent webinar extolling the virtues of title insurance.
So I turn to the elderly gentleman sitting next to me (who has over 50 years running a survey business) and I ask if he ever heard of a title company paying out on a claim. He smiled at me, shook his head no and said "Jim, tonight we are eating chicken parm, the lawyers in the next room are having steak and lobster"

What I feel is a bigger issue is lawyers underwriting title insurance for their clients they are representing in a reality transaction. Very common here in NY. I had one go bat sh*t crazy over a trail I showed crossing the subject property. He wanted me to remove it from my survey, said he was going to tell his client to refuse to pay me until I removed the trail. I called the client and explained the situation and he came right over and paid me, thanked me for my honesty.

Turns out the trail was under license to a ATV club. I bet I would have been the first one that lawyer would have blamed for not showing it when the sh&t hit the fan.

The old method in these parts was the package of an abstract of title and an attorney's opinion. The abstract was a fantastic piece of information with its dozens of pages of history but the attorney's opinion didn't amount to squat. Ever try to sue an attorney for damages??????

Holy Cow, post: 376731, member: 50 wrote: Ever try to sue an attorney for damages??????

yes, actually once for non-payment of a survey bill. won the case and even collected attorney/court fees. Had to bring the bas*tard back to court twice. Judge wasn't impressed and more less said if he didn't cut a check then and there he was going bye bye for contempt.

Had another attorney want me to ad his name to my certification, when told I only certify to my client, lender and title company he went overboard on how all the other surveyors do it (they don't) and how he wouldn't render an opinion etc.

He got over it when I told him I would add his name to my cert for the full fee of the survey as my insurance carrier frowns on me extending my liability to third parties that do not compensate me for such liability.