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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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Shawn Ramsey
Brokers Real Estate
1602 Forest Glen Ct.
Pantego, TX 76013
Office: 682-233-0224
Cell:    817-360-9045
Email: sramsey@dfwbre.com

Testimonials

"Shawn made buying my first home a breeze! He took the headache out of all the paperwork, the inspection process, and the endless search for the perfect house. In two weeks of working with him, we found exactly what we were looking for. He is knows the ins and outs of foreclosures. I'm thankful for the referral! " Jennifer Shoemaker
"Hey Shawn! I was just thinking about you today because I noticed it was the 23rd - its been 4 months since we've closed. I can't believe its already been that long. I don't know if I thanked you enough for everything you did for me and Josh. So, here's another "thank you." We were pretty clueless on the process because it was our first home purchase, and you made us feel so comfortable. We love our house! Our summer was sort of crazy, so we're still making it our "home." But its still wonderful even if I still have some boxes here and there. Anyways, I'll let you go because I know you're busy busy! Oh, thanks so much for the fridge! You saved us some money and shopping! Thanks again for everything!!" Julie Calahan
"We were relocating from Pennsylvania to Dallas and had a very short window in which to find a house. We selected online the houses we wanted to see prior to our arrival and Shawn arranged and mapped out three days worth of houses to view. By the time we left we had a house. While still in Pittsburgh Shawn helped us finalize our closing from a far and assisted us with finding numbers to utility companies and or anything we needed. We have moved every year for the past 5 years and this by far was the best experience yet!" Withheld
"Shawn was extremely helpful, efficient and organized. He respected our busy schedules, only requested necessary information and worked well with our schedules to assist us in finding the perfect home." Rick Ybarra
"It was a great experience. Shawn was an outstanding communicator and went above and beyond to make us feel comfortable throughout the process. He kept our best interest in mind at all times and made the purchase of our home the easiest real estate transaction we've ever had. Simply outstanding." Chris Hill
"He worked with me very well and explained how the purchase process works." Withheld
"I can't begin to tell you how FANTASTIC Shawn is! Shawn always had my best interests in mind. He never tried to force anything on me and ALWAYS told me when things weren't up to par. I grew to trust and value Shawn's opinions and expert knowledge of not only the real estate biz but also this neighborhood and the real estate market. I was totally terrified of buying a house by myself, but Shawn was there by my side from the beginning to the end and STILL called to check up on me after we closed. Explaining every step (over and over sometimes) and calming my fears... Shawn was great. Thanks for SUCH a great time Shawn. I'm almost sorry that we're done buying a house! :-) It's been a great pleasure working with you and getting to know you!" Brenda Schumacher
"There were difficult situations that popped up and Shawn was always knowledgeable and available at all times to solve the problem." Withheld
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