Definition of "How to get title insurance"

You’ve read all about how to stop a lien on your property, which convinced yourself that title insurance is a must. But now you’re wondering how to get title insurance. Where do you buy one? Is it something you must ask your real estate agent?

Well, you can, but he will probably answer what we’re about to answer, as real estate agents do not sell title insurance: whenever you enter the closing process and sign the purchase agreement, your escrow agent will launch the process of getting it (if you want to). The escrow agent or your attorney will choose which of the five major US title insurance companies will underwrite your policy.

How much will it cost to get title insurance? Differently from other types of insurance, with title insurance you typically pay a one-time fee of about $1,000 – but this amount can change from state-to-state. FYI, this fee is typically included in the closing costs, so that’s why the escrow agent is the one who asks you if it should be included. Another thing that will be asked to you is if you want both kinds of title insurance: the owner’s policy and the lender’s policy.

The Lender’s policy is typically required by most lenders in order to secure your mortgage. It’s a type of insurance for them to continue getting their loan amortization should a problem with your title arrive. And the owner’s policy is what most people are referring to when they talk about title insurance: in the event of a title problem, they cover the home buyer’s costs with the problem.

Fun fact: the normal would be, of course, that the home buyer pays for both kinds of title insurances, right? However, there are some states where it’s either negotiable who gets to pay, or the home seller is the one who pays for these insurance fees. The thinking behind it is that the home seller should be the one giving away a clean title, so he’s the one who should be responsible for covering everyone should a problem arise.

So, as you can see, it’s pretty simple to learn how to get title insurance. What’s very important is that you do get one. Just like that old phrase says: better be late than sorry!

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Questions

Popular Insurance Glossary Terms

Legislation providing that, to the extent that all deductible medical care expenses exceed 7.5% of the taxpayer's adjusted gross income (AGI), expenses not reimbursed under qualified ...

Life insurance policy provision under which the policyholder may apply the accumulated cash value, in the form of a single premium payment, to pay up the policy or to mature the policy as ...

Initial reserve plus the terminal reserve divided by two for any year of valuation. ...

Term used in the reinsuring of disability income insurance policies in that, after an extended period of time expires (in addition to the elimination period found in the disability income ...

Offset or subtraction of Social Security benefits from earned benefits in a qualified pension plan to reduce a pension benefit. Many business firms offset their pension payments by the ...

Procedure, in insurance, used in time series analysis to smooth out irregularities in projections of loss expectations. Irregularities to be smoothed out include: loss experience that is ...

Estimate of the funds necessary to maintain the life-style of a family after the death of the wage earner. ...

Additional hazard associated with aeronautics other than that of being a passenger on a regularly scheduled airline. An extra premium is charged, and/or there are usually exclusions applied ...

Clause in the Standard Fire Policy and many other property insurance policies that excepts coverage for losses caused by riot or civil commotion. Coverage for riot and civil commotion can ...