How Title Insurance Protects Buyers

How Title Insurance Protects Buyers

 
 
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This interview is for informational purposes only and listeners should check the specific wording of the coverages in their title insurance policy.

Our guest today is Erin Crocker B.A., LL.B, M.B.A. Erin is a lawyer and business development manager with Stewart Title. She joins us to discuss what title insurance is and how it can protect buyers.

[0:25] What does Stewart Title do and what is your role in the company?

  • Stewart covers residential and commercial title insurance.
  • I worked in private practice covering residential real estate and conveyance as well as commercial development.

[1:10] What is title insurance?

  • A policy that protects from losses due to specific risks that could adversely affect the interest in real estate.

[1:55] If someone buys a house, what can go wrong that requires title insurance?

  • Commonly it is inability to obtain complete or updated RPRs.
  • Title insurance covers what would be disclosed in those surveys.

[3:06] If you purchase a property and the seller can’t provide an updated RPR, who purchases the Title Insurance?

  • The seller may offer to cover the costs, but it is dependent on the deal structure.

[3:40] Can you give us an example of how Stewart Title has helped someone using Title Insurance?

  • If a buyer doesn’t receive an RPR and down the road finds the property they thought was part of their lot is actually city owned, they could face a loss on the property. Title insurance can compensate for that loss.

[4:36] How much compensation could they receive?

  • It varies case by case and how the issues are resolved, whether it’s negotiating use of property with the city or outright buying it.

[5:25] Is title insurance applicable to condos?

  • Yes, the same survey coverage is included.
  • It covers issues such as unit encroachment on common areas or vice versa and inaccuracies in the Estoppel Certificate.

[8:40] How is Title Insurance helping people during COVID?

  • If the land title office is closed while you are purchasing, there is coverage for a registration gap to cover the time between submitting and processing documents.
  • If a lien is placed against the title in the time between processing, you are covered for that.

[10:56] How else is title insurance being utilized during the pandemic?

  • Legislation changes now allow for documentation to be signed digitally.
  • If property tax documentation is missing, you are covered for outstanding debts against the seller.

[13:44] What is the difference between the title insurance required by lender and owner insurance?

  • The lender policy protects and pays out to the lender, and the owner policy serves the owner.

[14:25] What is the typical cost for a policy?

  • $125 for a lender policy and $50 for owners.

[15:40] Does the price increase with property value?

  • It increases nominally for properties over $500,000.
  • There is no price difference between acreage and city-based policies.

[17:17] If it was identity theft and a mortgage was bought under your name, is that covered?

  • There was a case of a father and son who had the same name. The son sold the property to a friend and they made off with the mortgage proceeds.
  • The father was able to recoup losses through the title insurance.

[20:58] Can you give examples of people thinking they were covered but weren’t?

  • The number one reason claims are denied is that no homeowner policy was purchased.
  • Secondly, risks that are created by or known to the buyer but not disclosed are not covered.

[23:25] If someone adds to their property without acquiring the proper permits then sells 30 years down the line, are the buyers covered?

  • Yes, there is a provision for permits.
  • Claims can only be made if a loss has occurred.

Contact Erin Crocker:

 

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