What Is the Average Title Insurance Cost and How Can You Get the Best Deals?
In this day and age, title insurance has become a true necessity. Even when it seems that a home was purchased after it had been in the possession of a single owner for more than 50 years, sometimes past issues tend to resurface, and you might find yourself in a crisis within months of closing the deal. Fortunately, title insurance doesn’t have to be too expensive, and you’ll find you can easily save on part of the costs, as long as you have all the information from the start.
What Should You Expect to Pay for Title Insurance?
While the average cost for homeowner’s policies might be more than $800, the average price you can expect to pay for title insurance is only around $540. Experts have come up with this figure by collecting data on closing cost estimates and mortgage amounts from a number of buyers purchasing homes rated around the national median value. Depending on the cost of the house, your credit score, the various risks and exceptions involved, and the specific coverage options and policy details imposed by each bank or insurer, title insurance costs can also vary, often between $400 and $1,000 for mortgage amounts of $200,000 to $400,000, and culminating with prices of over $1,600 for a house worth more than $900,000.
How Are Insurance Costs Determined?
Title insurance premiums can be affected to a great extent by pre-transfer work. This includes title searches, the examination of the property’s history and the resolution of any underlying title problems that have to be addressed immediately. The price will also depend on the ongoing work required to keep title information up-to-date, the expected compensation costs for any title defects that the coverage will include and the extent of the coverage itself – which can often be increased to account for less common situations that aren’t usually covered.
The Typical Insurance Coverage You Can Get
The primary coverage of a title insurance premium will likely cover your title search and the work involved with title issue resolution. Preexisting tax and liens are among the most common title problems that will be resolved as soon as they are uncovered. Also, if a dispute or a claim arises after you purchased the property and paid for your premium, your title insurance will compensate you or the lender (your bank) for any losses. Finally, your insurance company will also pay for all legal fees linked to covered title disputes.
How to Save on Title Insurance
The great thing about title insurance is that the costs aren’t usually set in stone, and there is a lot of room for saving and negotiating, especially when it’s in everyone’s interest that you purchase the house in question – including the bank, the insurance company and the seller. In most cases, you can save a lot of money on your title insurance coverage by opting to:
Look for several companies and shop around, comparing different coverage options to find the best one.
Buy the lender’s insurance required by the bank and your own title insurance as a single offer.
Avoid paying extra by negotiating on add-on fees.
Consider asking the seller to pay for your title insurance, especially in a buyer’s market.
Through these precautions you can usually get an excellent deal on your title insurance and avoid large payments that could even lead you to financial instability down the line.