Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Cheap Title Insurance—Help in Finding Cheap Title Insurance

Title insurance is a policy that affects the real estate industry. This is basically a form of indemnity insurance (protecting the lender) against financial loss.

You can start looking for cheap insurance rates now by entering your zip code!

This type of policy is typically created for protection against defects in the title to real property. It also serves as a protection against faulty mortgage liens that are discovered to be invalid. This type of insurance is primarily a product of the U.S. real estate market and was created mainly to counteract poorly written U.S. land records laws.

What is Cheap Title Insurance?

The policy was originally intended to protect the owner of a house, or the lender, but today it also protects the buyer. Before this type of business insurance policy was created, buyers bore the full responsibility for all agreements, regardless of fraud or invalid documents.

If anything was found to be wrong with the property, the buyer lost his/her investment without recourse.

This insurance policy might as well be called “records insurance”, because it involves all the little details of real estate transactions that can come back to bite you after the property has been sold. The insurance companies that handle title insurance insure problems like:

  • Title defects
  • Printing errors
  • Human errors

Without this type of insurance, many real estate deals would fall through and properties would have to continue unoccupied for years on end.

Most of the records today, dating back from the original creation of the house, are contained inside local courthouses or on a computer database. The process works like this: the most recent deed is researched and the grantee’s name is searched so that the record detailing the property acquisition can be verified. The records must clearly show ownership between all parties involved—yes, all whoever lived in or owned the house previously. The grantor’s name is also searched.

The chain of title is the most important aspect here, as a broken “chain” in ownership rights indicates that there could be a case of fraud, human error or mistake due to lost records. Some other records involved in this might include non-public records such as marriage records, death certificates and tax sales documents.

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Types of Policies for Cheap Title Insurance

There are three major types of title insurance policies to choose from.

  1. First, there is basic owner’s title policy. This policy assures the buyer of the home that the title is free from all defects, liens and any other technical issues that could otherwise ruin the deal. This policy also covers losses and damages that might result, should the property prove to be unsalable or should there be any right of access problems.
  2. A lender’s policy is issued to mortgage lenders, as opposed to buyers or owners. The policy mainly benefits the purchaser of the loan if the loan is sold. American Land Title Association forms are used for this transaction.
  3. There are also construction loan policies which are influenced by local state laws.

This policy guarantees that there is a clear title to the property in question, or that the insured party will be reimbursed if any errors or concerns are discovered. What’s nice about this policy is that it protects you for an unlimited amount of time. In fact, you only buy the policy once. You never have to pay it again. Even if you want to turn around and sell the house you can buy a “binder” coverage policy for just 10% more.

How Cheap Should Cheap Title Insurance Be?

The question is how do you choose a good title insurance policy? Usually, a seller or lender will have their own title insurance company chosen for you. However, you are not under obligation to buy this policy. In fact, a federal law called the Real Estate Settlement Procedures Act allows any homeowner the right to choose his or her own title insurance company. This is a right guaranteed to you by the federal government.

The more you search for these policies, the more likely you are to find a cheap one that fits your budget. Naturally, the policies that are included in your contract are usually more expensive than average price. Most buyers never think twice about shopping around over such a minor issue. However, every little detail can cost you big money.

Why not start looking for title insurance companies online? You can start looking in your local area for insurance companies that will protect your right to sell, buy or lend—without risk of losing everything over a small record discrepancy. Use the comparison tool by entering your zip code and compare online title insurance quotes now!