Am I crazy not to buy Title Insurance

[Anonymous]

We have to pay for the Lender's title insurance so we know the house (N.W. D.C.) has good title. In this age of digitization, you would think any outstanding liens would surface pretty quickly and easily and we would know about them.

I'm starting to feel like title insurance is a bit of a scam that's pushed by title companies because they get a percentage cut. What do people think? Too risky?

[Anonymous]

Anonymous wrote:We have to pay for the Lender's title insurance so we know the house (N.W. D.C.) has good title. In this age of digitization, you would think any outstanding liens would surface pretty quickly and easily and we would know about them.

I'm starting to feel like title insurance is a bit of a scam that's pushed by title companies because they get a percentage cut. What do people think? Too risky?

How can you get financing without title insurance?

[Anonymous]

my husband is uber-cautious and bought it for our townhouse, which we sold not too long ago. Thank goodness he bought it.
We bought our TH 15 years ago, refinanced 2-3 times and when we went to sell, the buyers lender found an old lien from 2 owners previous to us -- basically 30 years ago!!!! fortunately we had the title insurance and the companies sorted it out. but that was a stressful couple of days.
before this experience, i would have told you title insurance was a scam....

[Anonymous]

Both things are true. You almost certainly will not need it but you should not skip it. You aren’t getting for things that show up but for things that you don’t know about— maybe a survey was drawn wrong or maybe an ex-wife has a dower claim that surfaces later. Skip the enhanced policy but don’t skip it altogether.

Tl:dr foolish way to save money

[Anonymous]

It is incredibly cheap insurance. Not sure why you wouldn’t buy it.

[Anonymous]

Your lender's policy will not protect you. This is your biggest asset (probably). It's expensive, but if you need it, you REALLY need it.

Similar to poster above, we had a sale almost fall through because of a title issue from 3 owners prior -- the sale was an estate and was not only recorded incorrectly but they didn't get releases from all the beneficiaries. Title insurer spent weeks tracking down the missing beneficiaries and offered them $$$ to relinquish claim. Title insurer also sent an attorney to handle a new probate case in local court, because the estate basically had to be reprobated. It would have cost us north of $50K if we'd had to deal with it ourselves.

I'm still livid at the original title company from when we bought the house. We gave them $3K for title work and as best I can tell, they didn't do anything. (They also refused to work with the title insurer who was trying to resolve the case.) But VA has a 3 year statute of limitations so we were SOL.

[Anonymous]

You should buy it. It's a dumb thing to cut costs on as if you need it, you REALLY need it.

I've also had the last minute lien on the title from two owners ago. With title insurance, it's not my problem.

[Anonymous]

Piggybacking on the question - how closely do you need to read the fine print? Do these insurers tend to nickel and dime you ("we don't cover this, we don't cover that"), or are these policies pretty standard?

[Anonymous]

You don’t know you have good title. That is the point of insurance and why the lender required a policy. I would never skip title insurance.

[Anonymous]

Anonymous wrote:Piggybacking on the question - how closely do you need to read the fine print? Do these insurers tend to nickel and dime you ("we don't cover this, we don't cover that"), or are these policies pretty standard?

I think the standard policies and the prices are regulated by the state so that they are all equal. Enhanced policies will vary.

[Anonymous]

You need it.

We bought a house 2 years ago and both us and our agent were very on top of things. Still, we learned a day before closing that there were 2 liens on the house. Owners had not disclosed. Luckily it worked out but if anything had happened that title insurance would have been our only path to resolution.

[Anonymous]

Anonymous wrote:Both things are true. You almost certainly will not need it but you should not skip it. You aren’t getting for things that show up but for things that you don’t know about— maybe a survey was drawn wrong or maybe an ex-wife has a dower claim that surfaces later. Skip the enhanced policy but don’t skip it altogether.

Tl:dr foolish way to save money

+1

[Anonymous]

It is too expensive for what it is (claims payouts are 15%).

Honestly; it is a bit of a scam. But if your house is a big asset, insurance is essential.

Honestly I wish we had the iowa system of government insurance (it is 90% cheaper than the rest of the country)

[Anonymous]

Buy it. Our house had been owned for 20+ years by a Real Estate Attorney when we bought it (it was a rental).

He didn't have clear title. So, it turned out to be worth every penny.

I understand the position you're in, though. We almost didn't buy it, and in the grand scheme of buying a house, be sure that you do.

[Anonymous]

You should buy it. Are you willing to gamble the value of your house and whatever equity you have on it?