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Ask Dr. Don
By
Don
Taylor,
Ph.D.,
CFA
•
Bankrate.com |
Title insurance
Dear Dr. Don,
Should I buy title insurance if I am paying cash for my condo? There
will be no mortgage. I am being advised that I should buy it for
$700 and that 60 percent of the premium goes to my closing lawyer.
Mimi Mortgage
Dear Mimi,
Yes, you should buy title insurance for your condo even though there's
no mortgage lender. An owner's policy protects you against a host
of potential problems, such as forgery, identity of parties, incompetence
of former owners, interest of missing heirs and individuals not
having the right to sell property. The premium is paid once, and
the policy is effective for as long as title remains in the name
of the insured or her heirs.
Since you're buying an owner's policy you can shop
around for the best rates, coverage and reputation of the insurance
firm. In many states, however, title insurance premiums are established
by the state and may not be negotiable. Don't shop around because
you begrudge your attorney his cut of the premium. After all, it's
not a sales commission, it's for services rendered.
The U.S. Department of Housing and Urban Development
points out that, "In some states, attorneys offer title insurance
as part of their services in examining title and providing a title
opinion. The attorney's fee may include the title insurance premium.
In other states, a title insurance company or title agent directly
provides the title insurance."
That site has a good overview of why title insurance
is important and how consumers should proceed in Securing
Title Services.
-- Posted: Dec. 19, 2002
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