A very good article on a really complex product, thanks Joe.
I find Most people get the default Lender's Policy and have no clue that a Owner's Policy may actually provide some coverage they would really desire to have. Insurance is a strange beast.
It is time for us all to educate ourselves and "add value" to our traditional services.
In deed a good and informative article
to a complex issue and product
Just like any other insurance company, they make their money by collecting premiums not by paying out claims.
One issue in the article is very true-
""Title insurance companies would like you believe that they are the good guys standing behind you. After all, you are the customer who owns the policy.
In fact, many of the title insurance companies are more concerned about the real estate agents, lawyers and lenders who can steer business their way. The title insurance companies are well aware that most people do not shop around for title insurance""
Far too many pay for the policy without realizing that it only protects the lender via a Lender's Policy. The new owner has to pay an extra fee to obtain an Owner's Policy. This is standard practice. In a refinance situation, the homeowner should already have an Owner's Policy in place from when they purchased the property, assuming they learned they needed to pay the extra money to obtain one at that time. In a refinance situation, the Lender's Policy is for the value of the loan amount, not the appraised value of the property. Using the common 80 percent loan to appraised value ratio, the Owner's Policy needs to be for 125 percent of the Lender's Policy.
Whenever possible, provide your clients with this information. Too many buyers know almost nothing about title insurance and what it does, and does not do, for them.
It has been about 7 or 8 years but I believe the Owner's Policy was only about $50 more than the Lender's Policy... I was amazed! (Chicago Title in Az.)
PS:The title clerk had never heard of such a thing... the face value I specified was about 120% of the purchase price, which is now about 90% of current value.
The local title companies will not sell a full protection policy.
Every policy they sell has certain exceptions and disclaimers that will limit and reduce the policy to a point that the property owner is liable for many out of pocket expenses that full protection would cover and for expenses that are necessary to enforce the policy.
It sounds like there needs to be more competition in your area...
Have you tried any of the old national standbys like Lawyers, Chicago, etc.?