The Nuts and Bolts of Title Insurance

By Alec Dadisman, MiT National Land Services

Planning to purchase a new home soon? If so, I encourage you to do some research on title insurance. Most people outside the real estate industry have never heard of it and the ones who have are often confused by what it actually is. They understand what the two words mean separately but put the words together and they are completely lost. That’s okay - I used to be one of those people, too!

Though not required, title insurance is important when purchasing a property. It is an insurance policy that protects the owner against any losses arising as a result of defects in title associated with the property. There are various possible causes of title defects including fraud, human error, improper deeds and wills, liens and other claims such as outstanding mortgages. This is what makes title insurance unique! It protects the owner from possible hidden risk in the past as opposed to protecting the owner from a potential future event as with life or car insurance. 

After the contract is signed, the home buyer’s real estate attorney is typically the one who orders title insurance (though this can vary by state) and then works with the title company on the due diligence of the property. It surprises many people to learn that rates are regulated by the state, so quotes from different title agencies vary little from company to company. Once it’s been established the chain of title is clear, the parties are free to close. On the day of the closing, the buyer will pay a one-time premium based off the purchase price of the home which will continue to provide complete coverage for as long as the buyer or their heirs owns the property. This premium is usually wrapped up in additional closing costs. Therefore, it is not uncommon for some home buyers with title insurance to be unaware of what it is – or that they even have it - unless they end up needing to file a claim down the road. This is why I suggest you do research and know what you are paying for!

Title insurance is necessary because it provides you with peace of mind and protection of your property. It can save you money, time, trouble, and even your home against potential title defects. If a claim arises at any time while you or your heirs own the property, you would simply submit a claim just like you would under any other insurance policy. Title insurance assures any claim will be defended and, if warranted, paid.

MiT National Land Services is a premier title insurance agency capable of handling the largest multi-state commercial transaction to the simplest single-family home refinance. Our primary goals are to deliver the highest quality title services and make the client experience as friendly as possible. To learn more about title insurance, contact Alec Dadisman at (646) 647-2033 or adadisman@mitnational.com.