Do you need title insurance? Well, your bank is going to take out a policy, at least for the amount of your loan. Most of the time, buyers end up getting their own policy, to fully cover their investments. Your attorney will strongly suggest you do so.
Whether nor not you need a title insurance policy is an open-ended question.
Title insurance is “an outdated product that should have been all but wiped out by digital technology,” Scott Woolley opines in a diatribe on the industry that runs nearly 3,000 words in the latest Forbes. From its title — “Inside America’s Richest Insurance Racket” — to its rhetoric, the story doesn’t cut the industry an inch of slack. The big three title insurers, First American, Fidelity National, and Land America are “fat and thriving.” Woolley says, and “creaky old laws” have enriched the industry for decades, “and bilked home buyers out of billions of dollars.”
Woolley’s take is that a search of online records now costs only $25, and only $74 of each policy goes to pay claims, leaving “a $1,373 spread for overhead and for-profit” on the average $1,472 policy.
Real estate lawyers make a killing on the commissions charged on title insurance policies.
Whether or not they deserve that money, is another question. One that I’m not going to answer. (Like I need them on my bad side?)
Source: Forbes mounts the high horse, takes on the title insurance industry – Scott Woolley, Forbes, by way of Matt Carter, Inman News