Lender’s Title insurance and Owner’s Title Insurance

Your lender will require you to secure a lender’s title insurance policy. That’s because they want to ensure their loan is protected from title claims. Also available to home buyers is a second, optional policy known as the owner’s title insurance policy, which most home buyers choose to purchase as well. When you purchase both policies, you receive a “Simultaneous Issue Rate”. Many homebuyers don’t realize they are receiving this special rate and are often surprised to see how expensive a lender’s title insurance policy becomes when they opt out of the owner’s policy.

Most home buyers purchase these bundled policies because they understand the risks associated with not having the broader coverage far outweighs the savings of only purchasing the lender’s title policy and foregoing the bundled owner’s title policy.

Limited Title Insurance vs. Enhanced Title Insurance

Title insurance policies come in two levels of coverage. The first is a limited or standard policy which covers issues that should have been identified and resolved prior to closing, such as forgery, fraud, or a third-party claim of interest in the property. The second type of policy, the enhanced policy, covers many more pre-closing issues but also covers a host of post-closing issues that can arise such as building permit violations, encroachments, contractor liens, or post-closing fraud, forgery, and identity theft. Talk with your title company representative to determine which policy meets your home investment needs.

The Reissue Rate Discount

An experienced full-service real estate agent will always ask the title insurance company to give you this discount, if available. This discount is dependent upon how long the sellers have owned the house, the original issuing insurance underwriter, and where the property is located. This discount can lower the cost of your policy premium by as much as 40 percent.

To get this discount you will need to furnish a copy of the seller’s existing (owner’s) title insurance policy. An experienced real estate agent will reach out to the listing agent to check whether the seller’s still have a copy of the policy. If the sellers are unable to locate the policy your chosen title company may be able to locate a copy through an industry database. It is important to note, the existing policy issue date typically can’t exceed a certain length of time. This can be anywhere from seven to twelve years.

If you or any of your friends are planning to purchase a home in Northwest DC, Bethesda, Chevy Chase, Wakefield, American University Park or any of the surrounding neighborhoods, give us a call. We handle the details of your purchase, so you don’t have to. Service isn’t a big thing, it’s a million little things. Call us today!