An independent title insurance agency is a business that provides title insurance policies to protect property owners and lenders against any potential claims or disputes over ownership of the property. Unlike a captive agency, which is affiliated with a specific insurance company, an independent agency is not tied to any particular insurance provider and can offer policies from multiple insurers.
Independent title insurance agencies typically work with various title insurance underwriters to provide their clients with a range of policy options and coverage levels. They may also offer other services related to real estate transactions, such as title searches, escrow services, and closings.
As an independent agency, they work on behalf of their clients to ensure that they receive the best coverage and rates possible. They also provide personalized service and can help clients navigate the complexities of the title insurance process.
Everything You Need to Know About Title Insurance Policies
Title insurance is a type of insurance policy that protects property owners and lenders from financial losses due to defects or issues related to the title of the property. Here are some things you need to know about title insurance policies:
What it covers: Title insurance policies typically cover issues related to the title of the property, such as forged documents, errors in public records, undisclosed heirs, and liens or judgments against the property.
Types of policies: There are two types of title insurance policies: owner’s policies and lender’s policies. An owner’s policy protects the property owner, while a lender’s policy protects the lender.
Cost: The cost of title insurance policies varies depending on the location of the property, the purchase price, and the type of policy. The premium is typically paid at the time of closing and is a one-time fee.
How it works: Before issuing a title insurance policy, the insurance company will perform a title search to uncover any issues or defects related to the title of the property. If any issues are found, they will be addressed and resolved before the policy is issued.
Duration of coverage: Title insurance policies provide coverage for as long as the property is owned by the insured party or the lender.
Claim process: If a title issue arises, the insured party or lender can file a claim with the title insurance company. The insurance company will investigate the claim and provide coverage for any losses incurred due to the title issue.
Importance of title insurance: Title insurance is important because it protects property owners and lenders from potential financial losses due to title defects or issues. Without title insurance, a property owner could be at risk of losing their property or facing significant financial losses due to title issues.
In summary, title insurance is a valuable protection for property owners and lenders, and it is essential to have it in place before closing on a property.
Types of Title Insurance Policies You Should Know About
There are two main types of title insurance policies: owner’s policies and lender’s policies. Here are the details of each:
- Owner’s Title Insurance Policy:
An owner’s policy is purchased by the buyer of a property, and it protects the property owner from any losses that may arise from title defects or other issues. The policy covers any defects in the title that existed prior to the property’s purchase, as well as any claims that may arise in the future. This policy is typically issued for the purchase price of the property.
- Lender’s Title Insurance Policy:
A lender’s policy is purchased by the mortgage lender to protect their interest in the property. It is usually required by the lender as a condition of the loan. The policy covers the lender for the amount of the loan, and it remains in effect until the loan is paid off. Unlike the owner’s policy, the lender’s policy only covers issues that arise prior to the loan being made.
It is important to note that while the lender’s policy only covers the lender’s interest in the property, it can indirectly benefit the homeowner as well. If there is a defect in the title that results in a loss, the lender will be reimbursed by the insurance company, which could prevent a foreclosure on the property.
In addition to these two main types of title insurance policies, there are also enhanced policies and extended policies.
- Enhanced Title Insurance Policy:
An enhanced policy provides additional coverage beyond what is offered in a standard policy. This may include protection against certain zoning violations, building permit violations, and more. The cost of an enhanced policy is typically higher than a standard policy.
- Extended Title Insurance Policy:
An extended policy provides coverage for an extended period of time, often up to 30 years. This type of policy is typically purchased by commercial property owners, as the risk of title issues arising is greater for commercial properties than residential properties.
It is important to work with a reputable title insurance company to ensure that you have the appropriate coverage for your needs.
What’s the Difference Between Title Companies and Title Agencies?
The terms “title company” and “title agency” are often used interchangeably, but there are some differences between the two.
A title company is typically a large, national company that provides title insurance policies and related services, such as title searches and closings, in multiple states. They may have their own underwriters or work with multiple underwriters to provide title insurance policies.
A title agency, on the other hand, is typically a smaller, locally owned business that provides similar services but operates in a more limited geographical area. They may also work with multiple underwriters or be affiliated with a larger title company.
In terms of the services they offer, both title companies and title agencies can provide title searches, title insurance policies, escrow services, and closings. However, a title company may have more resources and a broader range of services than a title agency.
When choosing between a title company and a title agency, it is important to consider factors such as reputation, experience, and customer service. Both can provide high-quality services, so it may be a matter of personal preference and convenience.