Title insurance, like all other insurances available to consumers, protects parties from a potential financial loss under certain conditions. Whereas life insurance covers a loss of life, and medical insurance will cover costs related to healthcare, title insurance covers the loss of free and clear ownership or title interest to real estate. If you are a buyer or lender involved in a real estate transaction, you will likely choose to purchase title insurance as a part of your transaction.
Although Title Insurance is, in fact, an insurance product governed by the Pennsylvania Insurance Department, it is a completely unique type of insurance product, and differs significantly from other forms of insurance available to consumers today, such as Health Insurance, Auto Insurance, and Life Insurance. Title Insurance does NOT assume risk by performing actuarial analysis of possible FUTURE events, such as death or accidents. Title Insurance is design to protect the consumer from financial losses caused by defects in title arising out of events that have happened in the PAST.
To achieve this goal, title companies perform a search of the public records to determine whether there are any potential title problems or claims against the real estate owned, or being purchased by the consumer. Those problems are either eliminated prior to the issuance of a title policy or their existence is disclosed to the consumer and would appear as an exception from coverage in the title insurance policy.
All this extensive work performed by the title company prior to the issuance of a title insurance policy creates a unique situation whereby the consumer rarely has to file a claim with the insurer. This is good for the consumer for two key reasons: first, the consumer can feel confident that it is highly unlikely that they will ever experience a financial loss related to the title to their real estate, thereby giving the consumer important peace of mind, and second, minimal claims create a financial incentive for title insurers to keep title insurance rates low, thereby keeping consumer closing costs down. In fact, although most real estate sales commissions are about 6% of the sales price, and many mortgage loans could cost the consumer 1% or more of the loan amount in origination and processing costs, title insurance rates in Pennsylvania are less than 1% of the insurance amount for the average homeowner.
When comparing title insurance to other forms of insurance, it is easy to see the substantial difference in cost. For example, a $50,000 auto insurance policy can cost $1600 each year; a basic health insurance policy can cost over $3600 every year, however a standard $50,000 title insurance policy in Pennsylvania costs $558.75 just once, NOT yearly or monthly. Title insurance premiums are paid one time; at the closing. The consumer never pays a monthly or annual bill to keep their Title Insurance policy active.
Did you know that Pennsylvania is a buyers’ choice state and that you, the consumer, have a choice? A title company works for the person who pays the policy premium, and you are not required to use a title company selected by someone else. If your realtor or lender has offered to prepare a title insurance application for you, ask them to place the order with the Liberty Bell Agency. Since title insurance rates are approved by the state of Pennsylvania, you should find no difference in insurance cost. You will want to choose a title company based on their quality of service to you the consumer.
Liberty Bell Agency, Inc. is a full service Title Insurance Agency and has been providing for Title Insurance needs for more than a decade. Our company provides all aspects of the title insurance services needed by consumers today. Our strong team of professionals includes both attorneys and title examiners, each with many years of title experience. We underwrite for three of the largest title insurance companies in the nation, and we coordinate with these underwriters to bind title coverage and solve potential title underwriting problems quickly and efficiently.
Our offices are located in Center City Philadelphia. We can also accommodate your needs throughout the entire state of Pennsylvania.
We insure both residential and commercial properties, in PA & NJ, for all types of real estate transactions, including purchases, home equity loans and refinances. We hope we can be of service and look forward to hearing from you.
If you have any Title Insurance related questions, please contact us directly at our main office, or send us an email: TitleServices@LibertyBellAgency.com.