Welcome or Register
Back to Table of Contents

Title Insurance - Where Does Your Dollar Go?

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.

Article by CLTA

Back to Table of Contents

Thank you for visiting today. If this is your first visit, take your time and look around. We have plenty of information and resources available to you. If you are a return visitor, thank you. We would love to hear from you. We can serve all your real estate needs.

Quick Search


view all


Any

Any

No Min.

No Max.

Testimonials Page

Hello Janet, I just want to send a short note to thank you for your assistance in my purchasing the Lacey Street home. As you are aware, Gary and I had significant problems in finding a "qualified" real estate agent. When we found you, you made everything so easy..........you were very prepared.........you went way out of your way to assist us, even after the property was purchased. Things could not have gone smoother. Thank you for everything you have done. Mark Madding
Janet, My husband and I would like to extend our heart felt thanks to you for selling our home in Glen Lakes. We had previously listed the property without success. You provided us the necessary information to appropriately price our home and the home sold in a record 17-day period. We were thrilled with your results and would highly recommend your services to our friends. Thanks again so very much for your attention to detail and immediate success in selling our home. Kindest regards, Kevin and Natale Goff
Virginia, You went above & beyond to help make our dreams come true, making our first reality a paradise! to the first potential "yes" homes to home you were with us every step of the way. You truly do make miracles happen. Thank You for all of the prayers. Thank you from the bottom of our hearts. Brenda and Billy Lummus
Thank you for the efficient and speedy way you handled the sale of my house in Glen Lakes. Although I never met you, I feel as though I've made a new friend. I could tell in our phone conversations that you had my best interests at heart and worked quickly to find a buyer who was just right for my home. Your friendliness and the way you kept me informed about the way things were going impressed me. I really appreciate the promptness of the finalizing and your willingness to help make details clear to me. May God bless you with good health, success and prosperity in the future. It was a joy to work with you, my friend! Sincerely, Mona FayeLewis
View All

Thank you for visiting today. If this is your first visit, take your time and look around. We have plenty of information and resources available to you. If you are a return visitor, thank you. We would love to hear from you. We can serve all your real estate needs.