Title insurance is one of the most important aspects of buying a home or property that is commonly overlooked. Whether because of the fear of adding more costs onto the already significant financial decision that is buying a home or due to a lack of understanding of what title insurance is, many people remain uninformed about the benefits of title insurance and why they should secure a policy.
However, selecting a title insurance company and policy does come with some need to vet and learn more about the title insurance agency. As you consider your options, be sure to include the following questions among those that you ask to your prospective title insurance provider.
What Is The Cost Of The Policy?
For many people, the actual real cost of the title insurance policy is one of the most important aspects. Understanding how much your insurance policy will cost, when you pay it, whether you can wrap it into your mortgage and more are all critical elements of this financial decision. Your lender should be able to clearly give you a number that represents the cost of the title insurance police. Note that title insurance works differently than many other types of insurance; you will pay for your title insurance as a lump sum rather than in monthly installments, simplifying your financial planning.
Is My Escrow Secure, And How?
Your title insurance company will be responsible for holding onto the money that you are paying for your title insurance policy until closing, when the policy goes into effect as the property is transferred into your name. Not all insurance agencies are created equally when it comes to the reliability of their escrow accounts. Unfortunately, it is not unheard of for someone’s escrow investment to be lost or mismanaged at a less than reputable company. Be sure that you ask how your title insurance agency plans to keep your escrow secure.
Are There Additional Fees And Charges?
When you ask for the cost of the title insurance policy, your lender may or may not be including any additional fees or charges that go into applying the policy in your name and completing all of the necessary checks. It is important that you clarify whether fees and other unexpected responsibilities have already been discussed.
Your transaction with a title insurance company may include wire transfer fees, fees to cash checks, electronic delivery fees and more as part of the process that may not be included in the single premium number you have already been given for the policy. This could leave you unprepared for these expenses—and a lender who offers below average rates could indicate that they will make up the difference in such fees.
What Does My Policy Cover (And What Is Excluded)?
Naturally, you are acquiring title insurance as a means to protect the home or property that you are purchasing. This means that understanding exactly what the policy covers is critical. Do not assume that a standard title insurance policy will cover every possible eventuality that could arise as an issue with the home’s title. Most lenders also offer enhanced policies that can further cover potential pitfalls that are not included in a standard policy, such as zoning disputes.
A reputable lender will be able to recommend the type of insurance policy that is right for you based upon common issues in the area and other factors such as the age of your home. However, it is always worth reviewing the fine print of any contract or agreement that you sign so that you can feel confident in what you are getting.
Some of the most common elements that a title insurance policy will not cover include worsening of declared issues on the property, such as mold or pest infestations. It also will generally not include coverage for problems that are not attributable to a previous owner’s work without a permit, such as foundation damage or a leaky roof.
Trust The Professionals To Offer Reliable Title Insurance Guidance
Whether you are still in the decision phase of whether to acquire a home title insurance policy or you are ready to get started but still need to choose your insurance agency, you likely already have some questions. To learn more about how title insurance works and how it can benefit you specifically, rely on the experts.
The professionals at Mathis Title Company would be happy to explain how title insurance works and help you select the policy that is right for you. Reach out to learn more or to get started with an appointment.