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We have to have it but title insurance is a royal rip off.
One state in the US that is aware of it and kept it out is Iowa. You have to have title done by an attorney and its much cheap.
Pay out on title insurance is . 04% Yet look at what you get charged for it.
Most title searches turn up the potential problems before a policy is issued. Kind of like selling lung cancer insurance and weeding out all smokers, ex-smokers and children of smokers.
In VA most title policies protect the buyer's down payment and up to 125% subsequent equity (depends if you get the Eagle or whatever buzzword is the equivalent for enhanced coverage). So, with the OP's example, coverage would be $7500 and additional coverage would be require if improvements added. I understood it the same as JPrzybylski07 posted, there is a limit. Now off to read hbdwihdh378y9's link.
If the OP is wondering if the seller's attorney is doing extensive lien search for a $5000 purchase, your title coverage won't do much if you build a 300K home. But do not forego the initial coverage. Extending your coverage could be tricky down the road without an existing policy.
To answer the OP's question (and I can say I'm a "pro" since I'm a lawyer married to an escrow agent):
Yes, you need to supplement your original policy if you want to be covered for a value beyond the original policy limit. From the same linked source:
Texas and many other states have a highly regulated environment for title insurance; this works to the advantage of firms underwriting the coverage as the complexity and barriers to entry mean that the insurers simply write the rules and haul in the dough. It is a very anti-consumer kind of insurance but since the mechanism for recording deeds is 100% controlled by governmental regulation it truly is an extreme niche business.
The rate of claims is not all at related to the cost of the home; the decision to charge more for higher cost homes is largely arbitraty and based more on the title insurer's desire to maximize profit while not negatively impacting the burden on lower end home buyers (who tend to have higher than average rate of claims) but again this is a business driven decision...
In almost every other civilized country, there is no concept of title insurance. It's a US-specific rip-off designed to extract more revenue from home buyers. In other countries, the title deeds are correctly recorded, title searches are conducted in a professional and exhaustive way and in the rare cases where there are issues, the person doing the titling (typically a lawyer) carries insurance to cover a range of issues including dealing with titling issues. To me that is the way it should work.
Think the title insurance will pay you? Nope it protects the mortgage holder. Not the owner. It has no surrender value and lasts as long as you own the house (or re-fi - cha-ching). I'm sure the next 'innovation' in the title insurance industry will be to go to a yearly paid renewal.
I know I'm going to get a bunch of RE professionals saying things like "but you have to have title insurance" either because it is required, or saying that without it you are at risk. My reply is just have a professional conduct the conveyance and have that person carry the insurance. Oh and if the mortgage company wants to protect their investment, how about they pay for it?
Want to shop around? Think again. There's no competition and even a re-fi attracts this loathsome fee' on the same place you already paid title insurance on at some point in the past. Just incredible.
Only in the US could insurance companies dream up such a lucrative scam.
In almost every other civilized country, there is no concept of title insurance. It's a US-specific rip-off designed to extract more revenue from home buyers. In other countries, the title deeds are correctly recorded, title searches are conducted in a professional and exhaustive way and in the rare cases where there are issues, the person doing the titling (typically a lawyer) carries insurance to cover a range of issues including dealing with titling issues. To me that is the way it should work.
Think the title insurance will pay you? Nope it protects the mortgage holder. Not the owner. It has no surrender value and lasts as long as you own the house (or re-fi - cha-ching). I'm sure the next 'innovation' in the title insurance industry will be to go to a yearly paid renewal.
I know I'm going to get a bunch of RE professionals saying things like "but you have to have title insurance" either because it is required, or saying that without it you are at risk. My reply is just have a professional conduct the conveyance and have that person carry the insurance. Oh and if the mortgage company wants to protect their investment, how about they pay for it?
Want to shop around? Think again. There's no competition and even a re-fi attracts this loathsome fee' on the same place you already paid title insurance on at some point in the past. Just incredible.
Only in the US could insurance companies dream up such a lucrative scam.
In almost every other civilized country, there is no concept of title insurance. It's a US-specific rip-off designed to extract more revenue from home buyers. In other countries, the title deeds are correctly recorded, title searches are conducted in a professional and exhaustive way and in the rare cases where there are issues, the person doing the titling (typically a lawyer) carries insurance to cover a range of issues including dealing with titling issues. To me that is the way it should work.
Think the title insurance will pay you? Nope it protects the mortgage holder. Not the owner. It has no surrender value and lasts as long as you own the house (or re-fi - cha-ching). I'm sure the next 'innovation' in the title insurance industry will be to go to a yearly paid renewal.
I know I'm going to get a bunch of RE professionals saying things like "but you have to have title insurance" either because it is required, or saying that without it you are at risk. My reply is just have a professional conduct the conveyance and have that person carry the insurance. Oh and if the mortgage company wants to protect their investment, how about they pay for it?
Want to shop around? Think again. There's no competition and even a re-fi attracts this loathsome fee' on the same place you already paid title insurance on at some point in the past. Just incredible.
Only in the US could insurance companies dream up such a lucrative scam.
In almost every other civilized country, there is no concept of title insurance. It's a US-specific rip-off designed to extract more revenue from home buyers. In other countries, the title deeds are correctly recorded, title searches are conducted in a professional and exhaustive way and in the rare cases where there are issues, the person doing the titling (typically a lawyer) carries insurance to cover a range of issues including dealing with titling issues. To me that is the way it should work.
Think the title insurance will pay you? Nope it protects the mortgage holder. Not the owner. It has no surrender value and lasts as long as you own the house (or re-fi - cha-ching). I'm sure the next 'innovation' in the title insurance industry will be to go to a yearly paid renewal.
I know I'm going to get a bunch of RE professionals saying things like "but you have to have title insurance" either because it is required, or saying that without it you are at risk. My reply is just have a professional conduct the conveyance and have that person carry the insurance. Oh and if the mortgage company wants to protect their investment, how about they pay for it?
Want to shop around? Think again. There's no competition and even a re-fi attracts this loathsome fee' on the same place you already paid title insurance on at some point in the past. Just incredible.
Only in the US could insurance companies dream up such a lucrative scam.
Also what happens if the person doing the titling like a lawyer decides to retire or go out of business? Without an underwriter who will back up the policy holder should there be an issue then?
Also what happens if the person doing the titling like a lawyer decides to retire or go out of business? Without an underwriter who will back up the policy holder should there be an issue then?
Typically there is a partnership with transfer of powers to a new partner. It happens every day.
I'm paying cash for the land. Are you saying don't bother with the insurance?
I am not a lawyer so I can't comment on that, but I feel very strongly that TI is one of the biggest scams going.
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You are confusing the regulatory "limit of charge" with the actuarial cost...
