Title Insurance and the Wonderful World of Reissue Rates

Many of your clients hear the words title insurance and automatically think that it is just another type of insurance that they will never need, one more way for someone somewhere to make money. This is not the case. Title insurance can be the best way a purchaser can protect their interest in their new property. Title insurance is your clients’ policy of protection against loss as a result of defects on title that may result in a claim against your client’s ownership of the property.

During settlement the purchaser will obtain two types of title insurance. First is an owner’s policy, which protects the buyer’s ownership of the property until he or she no longer has an interest in the property. In addition the purchaser will also obtain a lender’s policy, which is required by the lender to protect the lender’s interest based on the amount of the mortgage.

In regards to the owner’s policy, purchasers may obtain one of two types of title insurance. Most title insurance companies offer a basic policy and an upgraded policy that includes increased coverage for the escalation of the property’s value. Purchasers should be aware of the distinctions between the two types of policies in order to make an educated decision in regards to the type of coverage they would like.

In the instance that a claim does arise against the property, title insurance will, according the terms of the policy, assure your client a legal defense and pay all court costs and related fees. In the event that a claim proves to be valid the insured owner will be reimbursed for the actual loss up to the face amount of the policy.

In the State of Maryland title insurance companies are regulated by the Maryland Insurance Administration. As a result most title insurance premiums are fairly standard from one company to the next.

What most of your clients may not be aware of is that a purchaser of real estate may be entitled to receive a discounted rate for title insurance so long as the seller’s title, as owner, has been insured prior to the application for a new policy. In order to obtain the reissue rate the purchaser must obtain a copy of the current owner’s policy issued by a title company licensed to conduct business in the State of Maryland.

In the market today properties are being refinanced, purchased and sold time and time again. Because of that title insurance has become a necessary tool that provides purchasers piece of mind. Having an owners title policy could be the key to avoiding delays in settlement.

By: Vanessa Carlo-Mirianda, Esq and Steve Ireland