Like other types of liability coverage, title insurance is a form of indemnity that insures land and property owners against financial loss stemming from defects in titles to real property and the invalidity or unenforceability of mortgage liens because of these defects. It will protect an owner or lender against lawsuits based on these defects. It will also reimburse the insured party for any financial loss that he or she has incurred, up to the dollar amount of coverage provided by the policy. This type of coverage is mostly found in the United States, but is available in other countries as well. It can be purchased to protect any interest in real property, including fee simple ownership, life estate, mortgage, lease, or easement. Also like other types of coverage, these policies come with fees. Title insurance fees can be added onto the cost of the policy to cover a variety of different things. Some coverage providers charge extra to have the policy looked over by an attorney, because certain states require that the insurer base the policy on the opinion of an attorney. Other providers may charge extra for the cost of creating the policy, searching the public records, examining the ownership documents, or closing a sale or mortgage transaction. Title insurance fees can be expensive, but the good news is that most of them are not regulated by state insurance law. This is true even in states where liability coverage is heavily regulated, and it means that you may be able to negotiate with the coverage provider and end up paying less than the original price of the policy. Another way to cut down on title insurance fees and save money on your policy is to shop around for the least expensive one. Different coverage providers charge different rates and some may add on charges that others include in the base price of the policy. For this reason, it's important to explore all your options and make an informed decision about which policy to buy. Understanding your state's liability coverage regulations can be difficult, so it might be a good idea to consult an attorney and ask him or her to explain the regulations, go through your options, and recommend a policy to you. Another way to save money is to ask for what is known as a "simultaneous issue rate." As discussed above, this type of coverage can protect lenders as well as owners, and your mortgage company may also require that a separate policy be issued in its name. This will insure that the bank or other lender has a valid first lien against the property in the event of a default on the mortgage. The homeowner will have to pay for that policy as well, so asking that both be issued at once under the simultaneous issue rate will generally lead to a discounted premium and half the amount of title insurance fees. Title Insurance Fees can be expensive. Michigan residents can find low rates here: http://www.libertytitle.com.
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