If you want to buy a house, you’re going to need title insurance, but very few homeowners know what title insurance is or how it works. This is a shame because while title insurance is very rarely needed, it can protect homeowners from huge financial losses.
What Is Title Insurance?
Anytime an individual decides to buy or refinance a house, they will have to get title insurance. Title insurance is a type of insurance that protects buyers and lenders from financial loss if ownership of the property or title is challenged. Title insurance was created over one hundred years ago when dishonest individuals would sell property they didn’t actually own. With the rise of the Internet, determining whether or not a seller actually holds the title to the property is much easier, but unfortunately, not foolproof. Although every homeowner will purchase title insurance, very few are actually aware of their rights if they need to submit a claim.
The Rising Cost Of Title Insurance and Bad Faith Claims
You would think that because technology has made searching for information about property titles easier that title insurance would become less expensive. However, prices for title insurance are actually increasing. One of the largest title insurance companies, First American, has actually doubled its prices over the past decade. This is easy for title insurance companies to do, because most states have laws in place preventing other insurance companies from offering title insurance. This means the title insurance market is small and faces little competition. In total, title insurance is an $18 billion industry.
Not only are the costs of title insurance rising, but many policyholders are also discovering the hard way that title insurance companies often use bad faith tactics to avoid paying out on claims. Like any other type of insurance, a title insurance company’s first objective is to make money, and some companies take this objective too far by wrongfully denying valid claims. Unfortunately, many policyholders are completely unaware of their rights and accept the claim denial at face value.
Get Help With You Title Insurance Claim
Buying any type of property is a huge investment, so before you sign on the dotted line, it’s important to make sure all related contracts are fair. At Feldman & Feldman, we can review title insurance policies to make sure they provide proper coverage. If property has already been purchased, we can help with any title insurance disputes. Call us today to schedule an appointment to learn how we can help.