How To Shop For Title Insurance
Explore when to shop for title insurance, who the providers are, how the process works, and how to make a claim.
Who chooses the title insurance provider?
The homebuyer in a purchase and the homeowner in a refinance usually choose the title insurance company. This choice is actually protected under Section 9 of the Real Estate Settlement Procedures Act (“RESPA”), which prohibits a seller or a lender from requiring that a buyer/borrower use a particular provider. There may be occasions where the seller is paying for the title and escrow work and they may negotiate to choose the provider. There are also regional variations in who customarily pays for the title insurance in a property sale.
When do I start shopping for title insurance?
The earlier in the process, the better. If you do your research prior to making an offer on a home or prior to applying for a loan, you will be ahead of the game. See below for more detail.
You will be better-informed, and better able to negotiate and proceed towards closing with confidence.
Can I change title companies later in the process?
Generally speaking, you can change title providers after a transaction has commenced. You may want to consider doing so if there are significant problems with the chosen provider or if you become aware of significant cost savings that are available from a different provider. However, before you make such a change, you should be aware of how it might affect the timing of your transaction, whether your contracts allow you to make a change, and whether you will be responsible for any costs due the existing provider. If you feel a change is necessary, you should consult with your real estate agent in a purchase transaction or your lender in a refinance transaction prior to actually making the change.
Who provides title insurance?
There are a few types of title insurance provider you can work with depending on the insurance regulations of the state where the property is located.
Many states allow attorneys to provide settlement services and title insurance products. In such states, attorneys will typically provide title search, title exam and settlement services. They typically coordinate their services with a title insurance company or a title insurance agency in order to procure the appropriate title insurance policy at the time of settlement. In some states attorneys have preferential pricing that is not available through a title insurance agency. An attorney may be a good choice if the transaction is complex or has special features where having a attorney to assist is beneficial.
Title Insurance Agencies
Title Agencies are licensed companies that solicit, write, and issue title insurance policies. They perform the work required for a title insurance policy to be issued. However, they are not the actual insurer, rather, they are intermediaries between the title insurance company and the purchaser of the policy.
While some title insurance companies sell insurance directly to consumers, most title insurance companies offer their insurance products through title agencies with whom they have formal relationships. In some cases the title insurance company actually owns the title agency and they may have the same name. Realtors and lenders will often have relationships with one or more title agencies in a given market and will tend to recommend you to those they have relationships with. If they do make a recommendation it is important to keep in mind that the choice of title provider is yours alone.
Title Insurance Companies
Title insurance companies are the entities that actually issue the title insurance policy. In most states title insurers are regulated and generally required to establish and maintain insurance underwriting guidelines and pricing in accordance with state-specific rules and regulations. Most title insurance companies work with consumers through title agencies and attorneys. Some will work with consumers directly, and are often able to offer more competitive pricing.
How do I shop for title insurance and how much does it cost?
Title insurance costs vary on a state-by-state basis. Some states set rates and all insurers are required to offer them uniformly in that state, while other states allow insurers to set their own rates. There may be significant savings, up to hundreds or even thousands of dollars, available to you that you can identify by shopping.
The price of a title insurance policy is generally based on the size of the transaction and the amount of coverage purchased. For an owner’s title insurance policy, it is common to purchase a policy with a coverage amount equal to the purchase price of the property. For a lender’s title insurance policy the coverage amount of the policy is usually equal to the amount of the loan.
We recommend that you start your search on tridster.com to get cost estimates for title insurance and settlement services in seconds for the states we work in.
How does the process work once I’ve chosen a provider?
Once you identify the provider you wish to work with, you will need to let the right people know.
In the case of a purchase, you should initiate the order with the title insurance provider of your choice and let your real estate agent and lender know.
In the case of a refinance, you should notify both the title insurance company you choose as well as the lender you're working with. Ultimately, the lender will initiate a title order with the title company, officially starting the process.
Making a claim if title issues come up
Most homeowners do not run into issues with the title to their properties. However, issues can and do arise. If you're going to encounter a problem, it's typically i) when you are trying to conduct a transaction related to your property, like refinancing, and your action is impeded by a title issue, or ii) when someone makes a claim against you or the property.
What to do if you become aware of a title issue?
If you experience a problem with the title to your property, you should review your title insurance policy and take any required action in a timely fashion. If you aren’t able to locate a copy, the title provider who handled your transaction should be able to provide you with a copy. The title insurance policy will include instructions regarding the filing of claims that you should review and follow carefully. Depending on the nature of the problem you may want to consult an attorney who is experienced with property title matters for advice. You may also wish to contact your title insurance company and explain to them what you have learned and the nature of the problem.