Where to Purchase Title Insurance and What to Consider

Title insurance provides financial protection against issues that could affect property ownership. This specialized insurance protects property owners and their lenders from losses stemming from defects in the property’s title. Unlike other insurance types that cover future events, title insurance focuses on past occurrences related to the property’s history. It safeguards against claims arising from defects such as unknown liens, encumbrances, errors in public records, or fraud and forgery.

Title insurance ensures the legal right to own a property is clear and free from undisclosed claims. Lenders typically require a policy to protect their financial interest, ensuring their loan is secured by a valid title. An owner’s policy protects the buyer for as long as they own the property, covering legal fees and potential losses if a covered claim arises. The premium is a one-time fee paid at closing, unlike recurring premiums for homeowner’s insurance.

Entities That Provide Title Insurance

Title insurance is primarily provided by specialized title insurance companies and agencies. These entities conduct title searches, identify potential defects, and issue policies. They also facilitate the closing process, coordinating various aspects of the real estate transaction. Many large national title insurance companies, such as First American Title, Old Republic National Title, and Fidelity National Title, operate through networks of local agencies across the country.

In some regions, real estate attorneys may also provide title services. These attorneys can handle the entire closing process, including performing title searches and issuing policies, effectively acting as the provider. Their involvement ensures legal oversight of the title examination and clearance procedures.

Lenders and real estate agents do not directly sell title insurance, but they often play a crucial role in referring or coordinating the purchase through a title company or attorney. They serve as facilitators, connecting buyers with title service providers.

How Title Insurance is Obtained

The process of obtaining title insurance begins once a sales agreement for a property is signed and submitted to a chosen title company. This initial engagement often comes through the buyer’s attorney, real estate agent, or the lender, who places the order for title insurance. The title company then initiates a review to establish the property’s ownership history.

A thorough title search examines public records related to the property. This extensive search uncovers issues such as past deeds, mortgages, liens, judgments, unpaid taxes, easements, or unresolved inheritance claims. The title company analyzes these documents to identify any “clouds” on the title that could affect ownership rights.

Following the title search, the title company issues a title commitment, also called a preliminary report or binder. This document outlines the current state of the title, detailing any defects, liens, or obligations that must be addressed before the policy can be issued. The title commitment also lists the conditions and requirements that must be met to finalize the policy, and buyers should carefully review it for exceptions to coverage.

Issues identified in the title commitment must be resolved before the transaction can proceed to closing. The title company facilitates the resolution of these matters, which might involve obtaining lien releases, correcting errors in public records, or settling outstanding claims. Once all conditions are satisfied and closing takes place, the title insurance policy is issued to the buyer and, if applicable, the lender, typically after the deed is recorded.

Key Considerations When Choosing a Provider

When selecting a title insurance provider, evaluating their reputation and experience is important. A company with a long track record and extensive experience in local real estate markets can handle complex title issues. Reviewing client testimonials and asking for recommendations from real estate professionals offers insight into a provider’s reliability and expertise.

Customer service and responsiveness are important factors that can significantly impact the transaction experience. Clear and consistent communication, prompt replies, and a helpful staff contribute to a smoother process. A title company’s ability to meet deadlines for document delivery, such as the Loan Estimate and Closing Disclosure, is also a sign of their operational efficiency.

While core title insurance premium rates may be regulated in some states, other fees associated with closing can vary significantly among providers. These additional fees might include closing fees, search fees, abstract fees, or document preparation charges. Obtain itemized quotes from several providers and compare all associated costs, ensuring a comprehensive understanding of what each fee covers.

The financial strength of the title insurance underwriter indicates their ability to pay claims in the future. Title agencies often work with larger national underwriters, and independent rating agencies like A.M. Best and Demotech assess their financial stability. These ratings provide an impartial assessment of the underwriter’s capacity to meet their obligations, offering a layer of confidence to policyholders.

Finally, while referrals from lenders or real estate agents are common, consumers have the legal right to choose their own title company under the Real Estate Settlement Procedures Act. This federal law prohibits any party from mandating the use of a specific title insurance company as a condition of sale. Exercising this right allows buyers to shop around, compare services, and select a provider that best meets their needs and preferences.