In the seminars and CLEs that Hallmark Abstract Service participates in, a question that will often get asked is why would one choose your firm over another title insurance provider?
Fair question as on the surface title insurance appears to be a commodity product and those who provide it nothing but commodity businesses.
But if one were to scratch below the surface and compare firms by using an apples to apples methodology, the reality is that there can most definitely be differences between two firms in addition to a significant disparity in the cost to the consumer!
Title Insurance Is There To Protect The Property Owners Rights To Their Property! Think That The Title Policy Provider That’s Chosen Is Irrelevant? Think Again!
Think Underwriter, Claims and Cost!
As a primer, title insurance is backward looking and ensures that when you close on a property whether commercial or residential that there are absolutely no encumbrances that could in any way raise questions concerning your ownership rights.
This fact of course makes title insurance very different from the forward looking insurance such as health or automobile that is protecting the policyholder against some potential future unknown occurrence.
But whether backward or forward looking, any insurance policyholder wants to be 100% confident in the fact that were a claim ever to arise, that the financial strength of the underwriter is and will be exceedingly strong and will never pose a problem concerning its ability to pay.
Therefore for the sake of argument, let’s assume that the title insurance underwriter that you choose (because individuals have the right to choose their title insurance provider), your attorney chooses or that the financial institution is working with is one of the financially strongest and highest-rated in the marketplace.
In the case where the underwriter is one of the best, does that fact render the title insurance company chosen to provide your policy irrelevant?
Claims and the Provider Chosen
Sorry, but the answer to that question is no because the policyholder needs to think among other things about the frequency that the title insurance company that they may be planning to use has experienced claims.
Now let’s assume that the title insurance underwriter is one of the best and that the company being considered has an excellent claims (or lack thereof) experience. Does this fact make the choice of a title insurance provider irrelevant? No it does not!
Concerning the question of consumer cost, the answer of whether the title insurance provider that you choose is irrelevant is still no because while the title insurance premium will be the same regardless of the firm that you use, the ‘other’ fees involved in your transaction can and likely will vary widely among firms!
So all things being equal regarding underwriter and claims experience (apples to apples comparison), why not choose to keep more money in your own pocket instead of in the pocket of the title insurance company?
Some title insurance rules of the road…
- In a purchase transaction ask your attorney for a title bill in advance and then ask another title company for a sample title bill based on the location of your property, the purchase price and the mortgage amount. Then compare the two and if there is a large difference do not be afraid to question that fact!
- In a mortgage refinance do the same comparison by providing a second title insurance company with the location of the property and the mortgage amount. Also, depending on the age of the mortgage being refinanced the borrower may be entitled to a reissue rate that is less than the normal premium and depending on various parameters a CEMA (Consolidation Extension and Modification Agreement) may be possible as well that will reduce the mortgage recording tax that is due. Ask the questions!
- Finally, understand that while a borrower or property owner may not be asked, it is their right to choose the title insurance provider that they would like to use!
Why Consider Choosing Hallmark Abstract Service For Your Title Insurance Needs?
Because in addition to the top underwriter that we use, our stellar performance as indicated by our lack of any title claims to date and charging some of the lowest ‘other fees’ in the industry, our commitment to customer service is second-to-none because we know that you have other options that you can choose!
And as an indication of the type of work that we do for our clients, Hallmark Abstract Service has been nominated Best Title Agency 2013, 2014, 2015 and 2016 New York Law Journal Reader Rankings (Learn more here: https://www.hallmarkabstractllc.com/new-york-law-journal-reader-rankings-and-hallmark-abstract-service/)!
In the comparison below Company ABC is an actual firm in the NYC/Long Island region with the name disguised…Google+