When You Look At Your Home, Which Of These Two Pictures Comes To Mind?

By | November 1, 2016

For a variety of reasons homeownership is one of the things in life that so many Americans hope to one day achieve!

Whether for a family or an individual, the thought of owning a home conjures up visions of  achieving the American dream, weekend barbecues, family get togethers, independence, a mortgage interest deduction of course and so much more!

In fact, homeownership is such a staple of the American lifestyle that years ago the month of June was designated Home Ownership Month!

When thoughts of owning a home cross your mind, do you think of something like this?

Why you need title insurance in New York

You likely do but, what if the sad reality after you have closed on the home looks more like this…

title insurance claim New York

The photo above is the look of a couple who took the title insurance provider being used on their purchase transaction for granted and, unfortunately, found out after the fact that issues had been discovered bringing their rightful ownership of the property into question.

They now regrettably face the prospect of mental angst, protracted discussions and a title claim along with potential litigation.

Is there anything that this homeowner should have considered or could have considered before the fact?

There absolutely was!

New York Title Insurance Rules Of The Road

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 products such as health or automobile that is protecting the policyholder against some potential future unknown occurrence.

Title Insurance Underwriter

But whether backward or forward looking, any insurance policyholder wants to be 100% confident in the fact that were a claim ever to arise, the financial strength of the underwriter is and will be exceedingly strong and 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 chooses 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?

Title Insurance Provider Claims History

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.

Assuming 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!

Cost

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?

If you have questions about your title insurance for a commercial or residential real estate transaction in New York State, ask away at info@hallmarkabstractllc.com!

Michael Haltman is President of Hallmark Abstract Service in New York and a Director of Heroes To Heroes Foundation.

He can be reached at mhaltman@hallmarkabstractllc.com or at 516.741.4723.

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