Title Insurance is an important protection for both owners and buyers in real estate transactions. Title insurance, as the name suggests, insures the policy holder against financial loss stemming from defects in title to real property. Many times these title defects are hidden to those involved in a transaction. Examples include improper legal description of the property, forged signatures, falsification of records, and title being taken by the wrong person after an improperly probated will.
Whatever the defect may be, there can be financial loss associated with it when a third party comes in and requests damages and expenses. The job of a title insurance company is to ensure that ownership of the property is clear and to protect the policyholder against claims to ownership interest. Usually, buyers and owners do no shop around for title insurance—often they will go with a title insurance company recommended by their attorney or real estate agent. But some companies are trying to change that.
Two companies, in particular, are trying to change the model for how consumers select title insurance. The companies, EnTitle Insurance and OneTitle National Guaranty, are now advertising to consumers directly through various means, including online. Increased advertising will surely mean more competition between title insurance companies, which could be a good thing for consumers.
One of the keys to selecting any title insurance company, of course, is whether the company has a good track record of accurate title searches and paying claims. Consumers shopping around are smart to do their research.
Source: Wall Street Journal, “Title Insurance for Less?,” Leslie Scism, March 28, 2014.
