Posted by Stacy (AZ) on February 23, 2001 at 15:46:05:
Yes, I saw your prior reply, David. Very good. What gets me, though, is that those who do their own title searches and skip the insurance are taking a gamble that everything will show up in that title search. Jerry’s reply to JGoodsen’s post outlines what the actual policy covers. Many of those things, if they exist, could be missed in a title search.
Yes, the odds are that any given title will be fine. But, if I’m making $10K to $30K profit, on average, it is entirely worth it to me to insure this profit for the small cost (relatively speaking), from any unseen defects. I consider it a crap shoot to do less, and I try to avoid operating this way.
Further, I think those who operate continually without title insurance are on borrowed time. Again, it’s the unseen and inconspicuous that threatens.
I’ve seen the aftermath of no Title Insurance, - Posted by David Krulac
Posted by David Krulac on February 23, 2001 at 15:14:33:
and beleive me its not a pretty site, Stacy. In my earlier post I gave 3 examples that I had personally witnessed, where the buyer wishes they had title insurance. If you are a competent title searcher, not the first time you’ve been in a courthouse, and feel lucky, then by all means forego the title insurance. If you have little to lose then forego the title insurance. HOWEVER, for about 99% of the people title insurance provides a safety net. If you like riding a hog without a helmet, then you’ll love buying property without title insurance. Maybe nothing bad will happen, but imho you’re increasing the chances.
On the opposite view Title insurance is the only insurance where you are insuring the past, and the title company excludes all known problems, and won’t write insurance if there is a title problem. It is one of the most lucrative insurance policies going. Somebody once told me that 50% of the premium goes to the writer, and the title companies hardly ever pay a claim. Sometimes they’re defend an assualt on your title, so that they don’t have to pay a claim. Here in Pa. the premiums are regulated by the state and the minimal amount that you can insure is $30,000 for a premium of $390. Too bad if you’re buying a $10,000 property.