Owner’s title insurance - to get or not?
Most Popular Reply
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2yI always say if you get owners title insurance, you will never use it. If you do not get it, you will have a situation where you need it.
I have actually made a claim on owners title insurance before. I purchased a property that was a foreclosure. Years later I was refinancing and they found a title defect. Property had not been properly foreclosed on, so they had to reforeeclose on it like a decade later. Didnt cost me a dime, just time pushing my refinance back.
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- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes2y
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
You're comparing apples with oranges. Try looking at the combined ratios.
Title Insurance: Combined Ratio data was reported at 103.300 % in Jun 2023. This records a decrease from the previous number of 105.200 % for Mar 2023. Title Insurance: Combined Ratio data is updated quarterly, averaging 101.550 % from Mar 2012 to Jun 2023, with 46 observations. The data reached an all-time high of 108.500 % in Mar 2012 and a record low of 94.900 % in Dec 2021. Title Insurance: Combined Ratio data remains active status in CEIC and is reported by National Association of Insurance Commissioners.
In 2020, the combined ratio of the American property and casualty insurance industry was 97.5%. - Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2y
Quote from @Carlos Ptriawan:
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
well you just convince us to open title company instead LOL
Haha, cofounders?
- Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2y
Quote from @Peter Walther:
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
You're comparing apples with oranges. Try looking at the combined ratios.
Title Insurance: Combined Ratio data was reported at 103.300 % in Jun 2023. This records a decrease from the previous number of 105.200 % for Mar 2023. Title Insurance: Combined Ratio data is updated quarterly, averaging 101.550 % from Mar 2012 to Jun 2023, with 46 observations. The data reached an all-time high of 108.500 % in Mar 2012 and a record low of 94.900 % in Dec 2021. Title Insurance: Combined Ratio data remains active status in CEIC and is reported by National Association of Insurance Commissioners.
In 2020, the combined ratio of the American property and casualty insurance industry was 97.5%.I'm open to changing my mind. Can you post the sources?
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes2y
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
I "almost" always get title insurance but I only purchase in Texas where title insurance is costly. Anything purchased for less than $5K I may not get T/I. I just had my first ever title claim. Underwriter's counsel took two months to confirm they were responsible for the claim even though is was clear they missed a $14,500 RTO (rent to own HVAC) lien that was filed in the public records at 4:30pm the day prior to my closing. Insurer's counsel negotiated the payoff down to $4K and then sent me an absurd set of documents to sign and refused to provide me a Bill of Sale and release of the UCC Financing Statement lien. Insurer's counsel was not acting in good faith as required by statute. After going back and forth over a couple of weeks, I finally had to hire an attorney who spoke directly to the RTO company, sent them the $4K on my behalf and I received both the release of lien and bill of sale via mail a few days later. My attorney then contacted the insurer's counsel for reimbursement and he refused to return emails or calls. I guess he knew my attorney solved the problem he refused to solve so why not wash his hands of the matter. I advised my title company I was filing a complaint with the Texas Dept. of Insurance and I then did a video (I have a good following on social media) explaining to my followers that I would be doing a subsequent video about the insurer's refusal to be accountable. Apparently the right person saw my post and within 24 hours my attorney received an email from the insurer's counsel say he would send a check immediately. So, the moral of the story is title insurance is valuable, but like any insurer, you'll likely need to hire your own attorney to get them to pay out on a covered claim. Don't expect title insurers to do the right thing unless you force them to do so. //// On a side note, I also sued Farmer's Insurance over a car accident when they refused to pay out over my uninsured/underinsured coverage. Took 7 years but Farmer's finally paid out the full policy amount. Yes, it seems there's a pattern here with insurers.
I'm sorry you had a difficult time with the one title claim you had to file but please don't paint with such a broad brush with such a limited experience. I don't know any of the facts of your claim which might give some justification to the delay but even if there is none, that doesn't mean there is a pattern with insurers. I've had insured's sing my praises to the high heavens because I was able to resolve their issue quickly.
It's not a personal attack...please don't take it as such. Having two insurers refuse to pay as stipulated in my policy may seem limited to you...it's very real to me. I have a good friend (attorney) who spent a good portion of his career suing insurers who refused to abide by their policies. Oddly enough, he never lacked for work.
I didn't take it as a personal attack, I took it as an unfounded attack on all claims handlers who do their job every day in good faith and try had to provide the insured the benefits they are due. I frequently had to explain to insureds, and their attorney's, why their claim wasn't covered under the policy, and rarely did they respond "oh, I'm sorry I was just trying to get something I wasn't entitled to."
I'm not claiming there aren't mistakes made in claims handling or incompetent or lazy claims handlers, just that there are lazy and incompetent attorneys representing insureds, but most aren't.
An attack? If you don't believe insurance claims are slow walked at times, you've been in the insurance industry too long. There was NEVER any doubt, not even by the insurers in my case, that they were responsible, otherwise they certainly would not have paid out on the claims. They simply made a business decision to force me to take action to get what I paid for. If stating a fact is an attack, you indeed did take it personally.
Ad hominems make for a weak response.
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes2y
Quote from @Carlos Ptriawan:
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
I "almost" always get title insurance but I only purchase in Texas where title insurance is costly. Anything purchased for less than $5K I may not get T/I. I just had my first ever title claim. Underwriter's counsel took two months to confirm they were responsible for the claim even though is was clear they missed a $14,500 RTO (rent to own HVAC) lien that was filed in the public records at 4:30pm the day prior to my closing. Insurer's counsel negotiated the payoff down to $4K and then sent me an absurd set of documents to sign and refused to provide me a Bill of Sale and release of the UCC Financing Statement lien. Insurer's counsel was not acting in good faith as required by statute. After going back and forth over a couple of weeks, I finally had to hire an attorney who spoke directly to the RTO company, sent them the $4K on my behalf and I received both the release of lien and bill of sale via mail a few days later. My attorney then contacted the insurer's counsel for reimbursement and he refused to return emails or calls. I guess he knew my attorney solved the problem he refused to solve so why not wash his hands of the matter. I advised my title company I was filing a complaint with the Texas Dept. of Insurance and I then did a video (I have a good following on social media) explaining to my followers that I would be doing a subsequent video about the insurer's refusal to be accountable. Apparently the right person saw my post and within 24 hours my attorney received an email from the insurer's counsel say he would send a check immediately. So, the moral of the story is title insurance is valuable, but like any insurer, you'll likely need to hire your own attorney to get them to pay out on a covered claim. Don't expect title insurers to do the right thing unless you force them to do so. //// On a side note, I also sued Farmer's Insurance over a car accident when they refused to pay out over my uninsured/underinsured coverage. Took 7 years but Farmer's finally paid out the full policy amount. Yes, it seems there's a pattern here with insurers.
I'm sorry you had a difficult time with the one title claim you had to file but please don't paint with such a broad brush with such a limited experience. I don't know any of the facts of your claim which might give some justification to the delay but even if there is none, that doesn't mean there is a pattern with insurers. I've had insured's sing my praises to the high heavens because I was able to resolve their issue quickly.
It's not a personal attack...please don't take it as such. Having two insurers refuse to pay as stipulated in my policy may seem limited to you...it's very real to me. I have a good friend (attorney) who spent a good portion of his career suing insurers who refused to abide by their policies. Oddly enough, he never lacked for work.
I didn't take it as a personal attack, I took it as an unfounded attack on all claims handlers who do their job every day in good faith and try had to provide the insured the benefits they are due. I frequently had to explain to insureds, and their attorney's, why their claim wasn't covered under the policy, and rarely did they respond "oh, I'm sorry I was just trying to get something I wasn't entitled to."
I'm not claiming there aren't mistakes made in claims handling or incompetent or lazy claims handlers, just that there are lazy and incompetent attorneys representing insureds, but most aren't.
An attack? If you don't believe insurers don't believe insurance claims aren't slow walked, you've been in the insurance industry too long. There was NEVER any doubt, not even by the insurers in my case, that they were responsible. The simply made a business decision to force me to take action to get what I paid for. If stating a fact is an attack, you indeed did take it personally.
Title insurance company is hard to lose money though, there's cap of dollar amount that can be claimed. So say max cap for the title insurance is $10,000 ; while owner purchase it for 2k. Then lets say there's only 1 title issue out of 500 being issued. This is great business.
This thread is good though, because all Title master is willing to give answer for the question with lot of details ! so I appreciate their effort.
Please see my post on combined ratios.
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes2y
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
I "almost" always get title insurance but I only purchase in Texas where title insurance is costly. Anything purchased for less than $5K I may not get T/I. I just had my first ever title claim. Underwriter's counsel took two months to confirm they were responsible for the claim even though is was clear they missed a $14,500 RTO (rent to own HVAC) lien that was filed in the public records at 4:30pm the day prior to my closing. Insurer's counsel negotiated the payoff down to $4K and then sent me an absurd set of documents to sign and refused to provide me a Bill of Sale and release of the UCC Financing Statement lien. Insurer's counsel was not acting in good faith as required by statute. After going back and forth over a couple of weeks, I finally had to hire an attorney who spoke directly to the RTO company, sent them the $4K on my behalf and I received both the release of lien and bill of sale via mail a few days later. My attorney then contacted the insurer's counsel for reimbursement and he refused to return emails or calls. I guess he knew my attorney solved the problem he refused to solve so why not wash his hands of the matter. I advised my title company I was filing a complaint with the Texas Dept. of Insurance and I then did a video (I have a good following on social media) explaining to my followers that I would be doing a subsequent video about the insurer's refusal to be accountable. Apparently the right person saw my post and within 24 hours my attorney received an email from the insurer's counsel say he would send a check immediately. So, the moral of the story is title insurance is valuable, but like any insurer, you'll likely need to hire your own attorney to get them to pay out on a covered claim. Don't expect title insurers to do the right thing unless you force them to do so. //// On a side note, I also sued Farmer's Insurance over a car accident when they refused to pay out over my uninsured/underinsured coverage. Took 7 years but Farmer's finally paid out the full policy amount. Yes, it seems there's a pattern here with insurers.
I'm sorry you had a difficult time with the one title claim you had to file but please don't paint with such a broad brush with such a limited experience. I don't know any of the facts of your claim which might give some justification to the delay but even if there is none, that doesn't mean there is a pattern with insurers. I've had insured's sing my praises to the high heavens because I was able to resolve their issue quickly.
It's not a personal attack...please don't take it as such. Having two insurers refuse to pay as stipulated in my policy may seem limited to you...it's very real to me. I have a good friend (attorney) who spent a good portion of his career suing insurers who refused to abide by their policies. Oddly enough, he never lacked for work.
I didn't take it as a personal attack, I took it as an unfounded attack on all claims handlers who do their job every day in good faith and try had to provide the insured the benefits they are due. I frequently had to explain to insureds, and their attorney's, why their claim wasn't covered under the policy, and rarely did they respond "oh, I'm sorry I was just trying to get something I wasn't entitled to."
I'm not claiming there aren't mistakes made in claims handling or incompetent or lazy claims handlers, just that there are lazy and incompetent attorneys representing insureds, but most aren't.
An attack? If you don't believe insurance claims are slow walked at times, you've been in the insurance industry too long. There was NEVER any doubt, not even by the insurers in my case, that they were responsible, otherwise they certainly would not have paid out on the claims. They simply made a business decision to force me to take action to get what I paid for. If stating a fact is an attack, you indeed did take it personally.
It appears you missed my point. Your apparently bad experience does not match up with my knowledge of the handling of thousands of claims which for the most part were handled appropriately. Your comment that an insured will probably need an attorney is really off the mark in my opinion.
I didn't miss your point Peter. I simply stated a fact based on my experience. Frankly, consumers are tired of being told by insurers how the insurers are honest, fair, transparent, etc. It just rings hollow. Please move along. We'll never see eye to eye as our experiences and facts are completely different and you're at risk of sounding like a politician when telling us how honest you are and that you're here to serve us.
I had a really bad experience with a real estate agent one time, I guess that makes them all dishonest.
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes2y
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
You're comparing apples with oranges. Try looking at the combined ratios.
Title Insurance: Combined Ratio data was reported at 103.300 % in Jun 2023. This records a decrease from the previous number of 105.200 % for Mar 2023. Title Insurance: Combined Ratio data is updated quarterly, averaging 101.550 % from Mar 2012 to Jun 2023, with 46 observations. The data reached an all-time high of 108.500 % in Mar 2012 and a record low of 94.900 % in Dec 2021. Title Insurance: Combined Ratio data remains active status in CEIC and is reported by National Association of Insurance Commissioners.
In 2020, the combined ratio of the American property and casualty insurance industry was 97.5%.I'm open to changing my mind. Can you post the sources?
How Do I Calculate the Combined Ratio? (investopedia.com)
United States | Title Insurance: Industry Financial Snapshots | CEIC (ceicdata.com)
U.S. : combined ratio P/C insurance industry | Statista - Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2y
Quote from @Peter Walther:
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
You're comparing apples with oranges. Try looking at the combined ratios.
Title Insurance: Combined Ratio data was reported at 103.300 % in Jun 2023. This records a decrease from the previous number of 105.200 % for Mar 2023. Title Insurance: Combined Ratio data is updated quarterly, averaging 101.550 % from Mar 2012 to Jun 2023, with 46 observations. The data reached an all-time high of 108.500 % in Mar 2012 and a record low of 94.900 % in Dec 2021. Title Insurance: Combined Ratio data remains active status in CEIC and is reported by National Association of Insurance Commissioners.
In 2020, the combined ratio of the American property and casualty insurance industry was 97.5%.I'm open to changing my mind. Can you post the sources?
How Do I Calculate the Combined Ratio? (investopedia.com)
United States | Title Insurance: Industry Financial Snapshots | CEIC (ceicdata.com)
U.S. : combined ratio P/C insurance industry | StatistaThis means that insurance companies spend a lot on underwriting, not necessarily that the risk protection for investors is the same.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
You're comparing apples with oranges. Try looking at the combined ratios.
Title Insurance: Combined Ratio data was reported at 103.300 % in Jun 2023. This records a decrease from the previous number of 105.200 % for Mar 2023. Title Insurance: Combined Ratio data is updated quarterly, averaging 101.550 % from Mar 2012 to Jun 2023, with 46 observations. The data reached an all-time high of 108.500 % in Mar 2012 and a record low of 94.900 % in Dec 2021. Title Insurance: Combined Ratio data remains active status in CEIC and is reported by National Association of Insurance Commissioners.
In 2020, the combined ratio of the American property and casualty insurance industry was 97.5%.I'm open to changing my mind. Can you post the sources?
How Do I Calculate the Combined Ratio? (investopedia.com)
United States | Title Insurance: Industry Financial Snapshots | CEIC (ceicdata.com)
U.S. : combined ratio P/C insurance industry | StatistaThis means that insurance companies spend a lot on underwriting, not necessarily that the risk protection for investors is the same.
What is your specific issue/claim ?
I had one 2 years ago and I consulted to Peter about my claim and he tell me what would happen and exactly it happened 100% like what he said, word by word. Although disappointed, but not too unexpected.
I'm impressed by all Title Expert in this thread though, so much knowledge. - Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2y
Quote from @Carlos Ptriawan:
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
You're comparing apples with oranges. Try looking at the combined ratios.
Title Insurance: Combined Ratio data was reported at 103.300 % in Jun 2023. This records a decrease from the previous number of 105.200 % for Mar 2023. Title Insurance: Combined Ratio data is updated quarterly, averaging 101.550 % from Mar 2012 to Jun 2023, with 46 observations. The data reached an all-time high of 108.500 % in Mar 2012 and a record low of 94.900 % in Dec 2021. Title Insurance: Combined Ratio data remains active status in CEIC and is reported by National Association of Insurance Commissioners.
In 2020, the combined ratio of the American property and casualty insurance industry was 97.5%.I'm open to changing my mind. Can you post the sources?
How Do I Calculate the Combined Ratio? (investopedia.com)
United States | Title Insurance: Industry Financial Snapshots | CEIC (ceicdata.com)
U.S. : combined ratio P/C insurance industry | StatistaThis means that insurance companies spend a lot on underwriting, not necessarily that the risk protection for investors is the same.
What is your specific issue/claim ?
I had one 2 years ago and I consulted to Peter about my claim and he tell me what would happen and exactly it happened 100% like what he said, word by word. Although disappointed, but not too unexpected.
I'm impressed by all Title Expert in this thread though, so much knowledge.My claim is saying 'you should always buy title insurance' is wrong. Be aware of how much you are paying for what amount of risk protection and then decide for yourself. A lot of peopled don't realize how low the payout ratio is.
Properties are purchased at the auction all the time without title insurance and a lot of people get rich doing it.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Shafi Noss:
Quote from @Carlos Ptriawan:
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
You're comparing apples with oranges. Try looking at the combined ratios.
Title Insurance: Combined Ratio data was reported at 103.300 % in Jun 2023. This records a decrease from the previous number of 105.200 % for Mar 2023. Title Insurance: Combined Ratio data is updated quarterly, averaging 101.550 % from Mar 2012 to Jun 2023, with 46 observations. The data reached an all-time high of 108.500 % in Mar 2012 and a record low of 94.900 % in Dec 2021. Title Insurance: Combined Ratio data remains active status in CEIC and is reported by National Association of Insurance Commissioners.
In 2020, the combined ratio of the American property and casualty insurance industry was 97.5%.I'm open to changing my mind. Can you post the sources?
How Do I Calculate the Combined Ratio? (investopedia.com)
United States | Title Insurance: Industry Financial Snapshots | CEIC (ceicdata.com)
U.S. : combined ratio P/C insurance industry | StatistaThis means that insurance companies spend a lot on underwriting, not necessarily that the risk protection for investors is the same.
What is your specific issue/claim ?
I had one 2 years ago and I consulted to Peter about my claim and he tell me what would happen and exactly it happened 100% like what he said, word by word. Although disappointed, but not too unexpected.
I'm impressed by all Title Expert in this thread though, so much knowledge.My claim is saying 'you should always buy title insurance' is wrong. Be aware of how much you are paying for what amount of risk protection and then decide for yourself. A lot of peopled don't realize how low the payout ratio is.
Properties are purchased at the auction all the time without title insurance and a lot of people get rich doing it.
but they would buy the title insurance at the end thru some company , right ?
- Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes2ySo do emotional responses. Truth is often a bitter pill.
Quote from @Peter Walther:
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
Quote from @Peter Walther:
Quote from @Guy Gimenez:
I "almost" always get title insurance but I only purchase in Texas where title insurance is costly. Anything purchased for less than $5K I may not get T/I. I just had my first ever title claim. Underwriter's counsel took two months to confirm they were responsible for the claim even though is was clear they missed a $14,500 RTO (rent to own HVAC) lien that was filed in the public records at 4:30pm the day prior to my closing. Insurer's counsel negotiated the payoff down to $4K and then sent me an absurd set of documents to sign and refused to provide me a Bill of Sale and release of the UCC Financing Statement lien. Insurer's counsel was not acting in good faith as required by statute. After going back and forth over a couple of weeks, I finally had to hire an attorney who spoke directly to the RTO company, sent them the $4K on my behalf and I received both the release of lien and bill of sale via mail a few days later. My attorney then contacted the insurer's counsel for reimbursement and he refused to return emails or calls. I guess he knew my attorney solved the problem he refused to solve so why not wash his hands of the matter. I advised my title company I was filing a complaint with the Texas Dept. of Insurance and I then did a video (I have a good following on social media) explaining to my followers that I would be doing a subsequent video about the insurer's refusal to be accountable. Apparently the right person saw my post and within 24 hours my attorney received an email from the insurer's counsel say he would send a check immediately. So, the moral of the story is title insurance is valuable, but like any insurer, you'll likely need to hire your own attorney to get them to pay out on a covered claim. Don't expect title insurers to do the right thing unless you force them to do so. //// On a side note, I also sued Farmer's Insurance over a car accident when they refused to pay out over my uninsured/underinsured coverage. Took 7 years but Farmer's finally paid out the full policy amount. Yes, it seems there's a pattern here with insurers.
I'm sorry you had a difficult time with the one title claim you had to file but please don't paint with such a broad brush with such a limited experience. I don't know any of the facts of your claim which might give some justification to the delay but even if there is none, that doesn't mean there is a pattern with insurers. I've had insured's sing my praises to the high heavens because I was able to resolve their issue quickly.
It's not a personal attack...please don't take it as such. Having two insurers refuse to pay as stipulated in my policy may seem limited to you...it's very real to me. I have a good friend (attorney) who spent a good portion of his career suing insurers who refused to abide by their policies. Oddly enough, he never lacked for work.
I didn't take it as a personal attack, I took it as an unfounded attack on all claims handlers who do their job every day in good faith and try had to provide the insured the benefits they are due. I frequently had to explain to insureds, and their attorney's, why their claim wasn't covered under the policy, and rarely did they respond "oh, I'm sorry I was just trying to get something I wasn't entitled to."
I'm not claiming there aren't mistakes made in claims handling or incompetent or lazy claims handlers, just that there are lazy and incompetent attorneys representing insureds, but most aren't.
An attack? If you don't believe insurance claims are slow walked at times, you've been in the insurance industry too long. There was NEVER any doubt, not even by the insurers in my case, that they were responsible, otherwise they certainly would not have paid out on the claims. They simply made a business decision to force me to take action to get what I paid for. If stating a fact is an attack, you indeed did take it personally.
Ad hominems make for a weak response.
- Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2y
@Carlos Ptriawan
I'm sure some do and some don't, neither of us have access to that data.If I had $5M cash and bought a $100k property that I was going to hold for 6 weeks after buying at the auction and did a good title search, the specifics matter but I could easily see myself rationally not buying title insurance.
Would you really claim everyone should always buy anything no matter the risk and no matter the cost? Absolute statements like that don't make sense.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Shafi Noss:
@Carlos Ptriawan
I'm sure some do and some don't, neither of us have access to that data.If I had $5M cash and bought a $100k property that I was going to hold for 6 weeks after buying at the auction and did a good title search, the specifics matter but I could easily see myself rationally not buying title insurance.
Would you really claim everyone should always buy anything no matter the risk and no matter the cost? Absolute statements like that don't make sense.
when you sell again after 6 weeks, dont you think you need title insurance ?
correct me if I'm wrong.
I'm in the title business and I have a story quite appropriate for this thread. ~6 years ago I purchased a property (seller finance) in WV using an attorney (not a title company) and was never even offered title insurance. (Neither was the seller/lender.) You can probably guess how this story unfolds.
Sure enough 4 years later out of the wordwork comes a lender from 2 transactions back (20+ years) claiming a HELOC was never paid/released and in fact continued to be drawn from by the prior owner/borrower. Was a ~$20k line now ~$50k owed.
Long story short I was at least able to defend myself, invoke the general warranty in my deed, add a claim against the attorney for malpractice... and the malpractice carrier paid the item days prior to the scheduled foreclosure.
To those who like to gamble and as I say to all buyers who decline owners coverage... Good luck!
Gimer Law516 Reviews- Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2y
Quote from @Carlos Ptriawan:
Quote from @Shafi Noss:
@Carlos Ptriawan
I'm sure some do and some don't, neither of us have access to that data.If I had $5M cash and bought a $100k property that I was going to hold for 6 weeks after buying at the auction and did a good title search, the specifics matter but I could easily see myself rationally not buying title insurance.
Would you really claim everyone should always buy anything no matter the risk and no matter the cost? Absolute statements like that don't make sense.
when you sell again after 6 weeks, dont you think you need title insurance ?
correct me if I'm wrong.
In that scenario, no I don't need title insurance. The buyers of the property or their lender may require title insurance, and I may need to pay it or pay for some of it to move the property. But I don't need it. Should I buy a second policy for myself in addition to the one for the buyer? All else equal I probably wouldn't.
Do you know that in some states title insurance companies pay referral fees to lawyers who refer them business and are not required to disclose it? Only attorneys can receive these referral fees for some reason.Or consider Iowa, which has a flat rate title insurance of $175 for every transaction and then the state guarantees clear title. Maybe someone else knows better than me but is Iowa real estate in shambles? None of my friends have ever told me they want to vacation in Iowa so I don't know maybe it is. Actually sliced bread was invented in Iowa so there is probably some really good joke that could be made with that.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Shafi Noss:
Quote from @Carlos Ptriawan:
Quote from @Shafi Noss:
@Carlos Ptriawan
I'm sure some do and some don't, neither of us have access to that data.If I had $5M cash and bought a $100k property that I was going to hold for 6 weeks after buying at the auction and did a good title search, the specifics matter but I could easily see myself rationally not buying title insurance.
Would you really claim everyone should always buy anything no matter the risk and no matter the cost? Absolute statements like that don't make sense.
when you sell again after 6 weeks, dont you think you need title insurance ?
correct me if I'm wrong.
In that scenario, no I don't need title insurance. The buyers of the property or their lender may require title insurance, and I may need to pay it or pay for some of it to move the property. But I don't need it. Should I buy a second policy for myself in addition to the one for the buyer? All else equal I probably wouldn't.
Do you know that in some states title insurance companies pay referral fees to lawyers who refer them business and are not required to disclose it? Only attorneys can receive these referral fees for some reason.Or consider Iowa, which has a flat rate title insurance of $175 for every transaction and then the state guarantees clear title. Maybe someone else knows better than me but is Iowa real estate in shambles? None of my friends have ever told me they want to vacation in Iowa so I don't know maybe it is. Actually sliced bread was invented in Iowa so there is probably some really good joke that could be made with that.
I become more confuse after reading this
- Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2y
Sorry if I did not write that clearly. I will guess at which part was confusing.
In this scenario, I could buy title insurance for myself when I'm the owner, and I could buy title insurance for the buyer for when they become the owner. You asked if I need title insurance after I sell. The answer is no I do not need insurance for a property I don't own.
- Member since 2019 · 7k+ posts · 4k+ votes2yWow I don’t even know it is possible for title company to give buyers title insurance when selling while seller is paying , I thought I have to get one first before selling.
Quote from @Shafi Noss:
Sorry if I did not write that clearly. I will guess at which part was confusing.
In this scenario, I could buy title insurance for myself when I'm the owner, and I could buy title insurance for the buyer for when they become the owner. You asked if I need title insurance after I sell. The answer is no I do not need insurance for a property I don't own.
- Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2yIn Texas for example, who pays for buyers title insurance is negotiable, but it is usually paid by the seller, and the buyer usually pays their lender's title policy.
Quote from @Carlos Ptriawan:
Wow I don’t even know it is possible for title company to give buyers title insurance when selling while seller is paying , I thought I have to get one first before selling.Quote from @Shafi Noss:
Sorry if I did not write that clearly. I will guess at which part was confusing.
In this scenario, I could buy title insurance for myself when I'm the owner, and I could buy title insurance for the buyer for when they become the owner. You asked if I need title insurance after I sell. The answer is no I do not need insurance for a property I don't own.
- Lender · Nationwide · Member since 2018 · 571 posts · 310 votes2y
Quote from @Shafi Noss:
In Texas for example, who pays for buyers title insurance is negotiable, but it is usually paid by the seller, and the buyer usually pays their lender's title policy.Quote from @Carlos Ptriawan:
Wow I don’t even know it is possible for title company to give buyers title insurance when selling while seller is paying , I thought I have to get one first before selling.Quote from @Shafi Noss:
Sorry if I did not write that clearly. I will guess at which part was confusing.
In this scenario, I could buy title insurance for myself when I'm the owner, and I could buy title insurance for the buyer for when they become the owner. You asked if I need title insurance after I sell. The answer is no I do not need insurance for a property I don't own.
I believe there is a discount if you can produce the old title policy.
Quote from @Shafi Noss:
@Carlos Ptriawan
I'm sure some do and some don't, neither of us have access to that data.If I had $5M cash and bought a $100k property that I was going to hold for 6 weeks after buying at the auction and did a good title search, the specifics matter but I could easily see myself rationally not buying title insurance.
Would you really claim everyone should always buy anything no matter the risk and no matter the cost? Absolute statements like that don't make sense.
As long as you've made an informed decision and are OK losing the $100k rather than spending X hundred $ to protect against that loss, I assume everyone here is fine with that. Good luck!
BTW a "good title search" is worth the paper it is printed on (or perhaps the cost of the search as max liability) without a title policy.
The basic sentiment of this thread is for the rest of us who aren't sitting on $5mm cash and can't afford to or don't wish to self-insure.
Gimer Law516 ReviewsQuote from @Tom Gimer:
I'm in the title business and I have a story quite appropriate for this thread. ~6 years ago I purchased a property (seller finance) in WV using an attorney (not a title company) and was never even offered title insurance. (Neither was the seller/lender.) You can probably guess how this story unfolds.
Sure enough 4 years later out of the wordwork comes a lender from 2 transactions back (20+ years) claiming a HELOC was never paid/released and in fact continued to be drawn from by the prior owner/borrower. Was a ~$20k line now ~$50k owed.
Long story short I was at least able to defend myself, invoke the general warranty in my deed, add a claim against the attorney for malpractice... and the malpractice carrier paid the item days prior to the scheduled foreclosure.
To those who like to gamble and as I say to all buyers who decline owners coverage... Good luck!
@Tom Gimer. I find it interesting that someone in the title business did not request for title insurance when it was not offered to you. But I agree that not getting owner's title is a gamble or calculated risk. I see it as a calculated risk if I pay for a lender's title. I bet in the example you gave, if you had a mortgage on the property, the lender's title would have covered the cost of fixing the problem and helped avoid foreclosure.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Shafi Noss:
Quote from @Carlos Ptriawan:
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Quote from @Peter Walther:
Quote from @Shafi Noss:
Many people are just saying 'you should get it' without providing any reasoning.
Let's look at some data:
Q4 2022, ALTA premiums were 4.4B. So maybe for all 2022 $16B. In all 2022, payouts were $600M. That's a 3.75% payout ratio.
https://www.prnewswire.com/news-releases/alta-reports-full-y...
For hazard insurance here's Statefarm in 2021: "Earned premium was $27.6 billion. Incurred claims and loss adjustment expenses were $20.0 billion". That's a 72% payout ratio.
Is the risk from hazard damage lower than the risk from title damage? I wouldn't guess so.
You're comparing apples with oranges. Try looking at the combined ratios.
Title Insurance: Combined Ratio data was reported at 103.300 % in Jun 2023. This records a decrease from the previous number of 105.200 % for Mar 2023. Title Insurance: Combined Ratio data is updated quarterly, averaging 101.550 % from Mar 2012 to Jun 2023, with 46 observations. The data reached an all-time high of 108.500 % in Mar 2012 and a record low of 94.900 % in Dec 2021. Title Insurance: Combined Ratio data remains active status in CEIC and is reported by National Association of Insurance Commissioners.
In 2020, the combined ratio of the American property and casualty insurance industry was 97.5%.I'm open to changing my mind. Can you post the sources?
How Do I Calculate the Combined Ratio? (investopedia.com)
United States | Title Insurance: Industry Financial Snapshots | CEIC (ceicdata.com)
U.S. : combined ratio P/C insurance industry | StatistaThis means that insurance companies spend a lot on underwriting, not necessarily that the risk protection for investors is the same.
What is your specific issue/claim ?
I had one 2 years ago and I consulted to Peter about my claim and he tell me what would happen and exactly it happened 100% like what he said, word by word. Although disappointed, but not too unexpected.
I'm impressed by all Title Expert in this thread though, so much knowledge.My claim is saying 'you should always buy title insurance' is wrong. Be aware of how much you are paying for what amount of risk protection and then decide for yourself. A lot of peopled don't realize how low the payout ratio is.
Properties are purchased at the auction all the time without title insurance and a lot of people get rich doing it.
they get bought at auction ( I know i have bought many many millions of dollars of them.. However when we go to refinance them or sell them title insurance is a must cant get title insurance and your stuck. Low value assets be them super cheap houses and low value land a lot of times are bought and sold without title insurance. And if your buying a foreclosure with the intent of paying cash never refinancing and basically never selling it then yes title insurance might not be needed.
However for sherrifs auctions of props in the 30 to 50k and up range title insurance is getting bought 98% of the time on those sales.
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