Title Insurance: As a homebuyer, the term is probably familiar - but is it understood? What is your dollar actually paying for when you purchase a title policy?
Title Insurers, unlike property or casualty insurance companies, operate under the theory of risk elimination. Title companies spend a high percentage of their operating income each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. Their technical experts are trained to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, the title company will proceed to clear those encumbrances which you do not wish to assume.
This theory is different from that of most other insurance where, for example, rates and anticipated losses are based on actuarial studies and premiums are pooled on the assumption that a certain number of claims will be made. The distinction is important: title insurance premiums are paid to identify and eliminate potential risks and claims before they happen. Medical and casualty insurance premiums, for example, are paid to insure against an unpredictable future event, knowing that risks exist and claims will occur. Furthermore, title insurance involves a one-time premium, paid when you close the real estate transaction, while property, casualty and medical insurance require regular renewal premiums.
The goal of title companies is to conduct such a thorough search and evaluation of public records that no claims will ever arise. Of course, this is impossible -- we live in an imperfect world, where human error and changing legal interpretations make 100% risk elimination impossible. When claims arise, professional claims personnel are assigned to handle them according to the terms of the title insurance policy.
As in all competitive business environments, rates vary from company to company, so you should make comparisons before deciding on a particular title company. Your real estate professional can help you do this. In addition, there are many helpful customer services provided by title companies which you and your real estate professional may find helpful to your transaction.
The issuance of a title insurance policy is highly labor-intensive. It is based upon the maintenance of a title plant, or library of title records, in many cases dating back over a hundred years. Each day, recorded documents affecting real property and property owners are posted to these title plants so that when a title search on a particular parcel is requested, the information is already organized for rapid and accurate retrieval. This investment in skilled personnel and advanced data processing represents a major part of the title insurance premium dollar.
Tim Tanz, CRS, GRI, ABR
1034 S Brentwood Blvd
St Louis, MO 63117
---We trusted Tim so well that we purchased a home through him simply by doing FaceTime with him at an open house. We lived in a different State and couldn't make it in time to a home that was having multiple offers and Tim made sure to put us first, thus guaranteeing our chance to make the successful bid that landed us our dream home! C. Haven -- 1201 Dunston Dr, Saint Louis, MO 63146
---We have purchased 2 homes and sold 1 home with Tim as our agent. If we have the opportunity to relocate back to the St. Louis area, our first call will be to Tim. When we purchased our first home through Tim, we didn't know anyone or very much about the St. Louis area. Tim took the time to show us many different areas which was very helpful in making our decision. He was very professional, detailed and walked us through the entire process. He made sure all the little details were taken care of. Tim has integrity and will tell you the truth about the market or about your home, even if you don't want to hear it. When we purchased and later sold our 2nd home, we didn't think twice about calling Tim. In my opinion, this one act put Tim way above the rest. During the sale of our last home, we had an issue with our moving company (basically they didn't show up the first day), so we had only one day to get our stuff out of the house and clean it up for the new owners. Tim came over and helped us with patching nail holes and cleaning. Not every agent would do that to help out their client. G. Allswede – 3476 Covington Parkway.