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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

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Testimonials Page

This property sale was very difficult to get accomplished. Mrs. Debbie Trey work many hours and months to get this sale done. I believe her dedication to this sale was second to none. I'm currently out of the country for my job but when I come back to Kings Bay and I'm looking for a home or land to purchase I will definitely seek out Mrs. Trey for I know she will not quit and that determination and dedication to her customers has left an impression on me forever. I highly recommend anyone looking for a home in southeast Ga to use Mrs. Trey she is defiantly an asset to the ERA team. Great Job! Very Satisfied Customer.
We have purchased a few homes over the years, and have not had much success in working with realtors until we met and worked with Ginny. Ginny has by far been the best realtor we have ever worked with. She kept us well informed of the status of the sale. She came through at closing when there was a glitch, thus allowing us to close on time. Ginny went above and beyond to make sure we made the purchase that was best for us. She told us about the new city we were moving to, such as the history things to do and see. Ginny made us feel welcome and excited about moving back to a smaller community. She is a keeper. Thank you to Ginny and your office for a great buying experience.
Ginny did a great job. She made sure we were aware of the status of the sale and was ready to jump in when there was a glitch at closing. Because of her actions we were able to close on time. Thanks so much. I would recommend her to friends and family.
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