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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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Mountain Home, ID 83647
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"Highly recommend Melissa as a seller's agent! As long distance home owners with renters living in the house, we certainly didn't have the ideal situation for selling a home. She handled EVERYTHING to make the process as seamless as possible. We had great communication and she was willing to do whatever it took to get our home sold-- working with the renters, arranging repairs, etc. Melissa quickly sold a home we hadn't laid eyes on in 7 years. We couldn't be more pleased with our choice to hire Melissa as our agent." eschore5
Our family was growing but unfortunately our home wasn't. When my wife and I finally made the decision to sell and build a new home there were all lot of choices for our real estate needs. Some brokers wanted 5% and others 6% to sell our home. That to us seemed unreasonable. We worked hard to build up equity over time and didn't want to give nearly a third of it to a Realtor. I then got in contact with Susan Richelieu at Assist 2 Sell. Susan told us that she could sell our home at a significantly lesser rate and offer the same full service assistance as all other realtors in town. Hard to believe, right? To be completely honest, she was wrong, because she wasn't just as good as other realtors in town...SHE WAS BETTER!! Susan did an amazing job marketing our home and she even found the buyer. She did everything and stayed in constant communication with us so that we were never left in the dark. We had an accepted offer within 2 months! The best part is she saved us over $5000 in real estate fees. All of that money went back in our pocket and into our new home. Thank you Susan for representing my family. You truly are the best in the business. Matt and Michelle Chandler
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