How is Title Insurance Different Than Other Insurance?
The word insurance is identified with images of protection and security. It is often associated with undesirable events and transfer of risk. While title insurance does include these elements, there are some distinct characteristics that differ from much of the insurance industry.
We insure the past, not the future
According to the American Land Title Association (ALTA), one-third of all title searches reveal a problem with a home’s title. The primary job of the title company is not simply to ensure that those flaws will not cause financial harm, but also to help remedy problems prior to your real estate closing. The majority of cost is thus not in reserving for future loss, but in problem recognition and resolution prior to closing.
Because there are hidden issues, title insurance also adds financial protection should a covered title problem arise after you purchase the home. The title policy is the end result of a search, examination and clearing of your title, and it provides financial protection to cover unforeseen issues, such as errors and mistakes in land records, forgery and undisclosed heirs, as provided in the title policy.
Because we insure the past, the consumer does not have a recurring payment to keep that coverage in place. Unlike the periodic monthly or annual payments made to keep traditional insurance in force, title insurance is a one-time expense paid at closing, which provides coverage for as long as you own the home, making it extremely cost-effective.
We not only protect, we enable
While we do offer a product, the production of title insurance often operates as a service. Though there are state variations, the title industry not only provides financial protection, but also enables successful real estate transactions.
Multiple parties are involved in real estate transactions, and the transfer of clear title is a very important process performed by the title company. Our network of independent agents and direct operations act as the trusted third party that facilitates a complex transaction and ensures the transaction is done correctly.
I hope this gives you a clearer picture of the value that we provide, and how it differs from other insurance products. The ALTA provides a more comprehensive description of title insurance, which I would encourage you to review.
Title Insurance is an essential business that enables successful transactions and provides assurance to homeowners and the lending community. Our work reduces mortgage interest rates and shortens the time it takes to complete a transaction. We make the complex simple so you can rest assured – making your house a home.