Paying For Owner's Or Lender's Title Insurance

Added January 19, 2009 by Ilyce R. Glink and Samuel J. Tamkin

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Summary: Title insurance companies offer two different types of title insurance policies: lender or mortgagee protection and owner's coverage. Owner's title insurance coverage protects the owner against a loss due to title defects not disclosed to the purchaser at or before the closing of the purchase. The lender's title insurance policy protects the lender against title defects.

Q. Almost two and a half years ago I bought a house. At the time of settlement, the title insurance company charged us over $1,000 for a title insurance policy.

The problem is, they've never sent us our title insurance policy. Despite our many reminders, nothing has shown up. What can I do to obtain my title insurance policy?

A. While you may have paid for title insurance at your settlement, you need to determine whether you paid for the lender's coverage or for your owner's policy as well.

Owner's title insurance coverage protects the owner against a loss due to title defects not disclosed to the purchaser at or before the closing of the purchase. The lender's title insurance policy protects the lender against title defects.

In some states, the owner's title insurance policy is ordered, and paid for, by the seller. In other states, the buyer orders and pays for title insurance. In just about all states, the buyer pays for the title insurance policy covering the buyer's lender. If you had a lender, you must have paid for a lender's title insurance policy. The only question remaining is whether the $1,000 was for the lender's policy only or both the lender's policy and an owner's policy.

Depending on how much detail is provided on your HUD-1 closing statement (also know as the title company settlement statement or RESPA statement), the closing statement may itemize the payments for title insurance by category. If the category was for lender's title insurance charges, you probably only paid for the lender's title insurance.

If you are certain you paid for an owner's title insurance policy, you should contact the office in which you closed on your property and ask them for the number of the department where the title policies are issued.

Once you have that number, you should contact the department to determine why there has been such a delay in delivering the policy to you. If you are not successful in obtaining information from the title company, you'll have to make a demand, in writing, on the title company to issue the policy. Send your demand by certified mail, return receipt requested, or by some other means to insure deliver with proof of delivery. You can then contact the regional office of the title company to make your demand and even file a complaint with the agency in your state that regulates title insurance companies.

If you used an attorney to close your transaction, he or she should assist you in obtaining the title insurance policy. If you did not use an attorney, you may want to find one to figure out what went wrong.

Published: Jan 19, 2009

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