Companies that advertise “discounted” title insurance are beginning to crop up on the Internet. Here are a few things to consider before even thinking about using an out of state discount title insurance carrier.
1. Premium Amount. All companies offering title insurance in Georgia must file their rates with the insurance commissioner’s office. Rates vary from company to company, but the traditional, national companies tend to have premiums priced in a similar range. In comparison, a “direct” insurer was shopped and the stated rates were in fact dramatically lower until endorsement fees were factored into the total premium price.
What is an endorsement? In title insurance world, an endorsement could be considered the financial equivalent to buying a new car, where the salesman provides an initial sticker price, but then asks whether the customer would like air conditioning, power steering or cruise control. My experience with a multitude of title insurers on residential policies is that in Georgia, most endorsements are “no fee”. Therefore, any endorsement fees should be considered as a part of the total title premium when comparison shopping.
2. Title Exam. In addition to endorsement fees, the “discount” insurer quoted substantially higher fees for the title examination, when compared to the Atlanta metro market. This “premium” drastically offsets the savings of the title premium.
3. Closing Fees and Other “Add On” Charges. Some discount insurers also quote closing fees. Again, when title premiums are being considered, the Federal government sets forth standards that must be included in a “Good Faith Estimate.” When the totality of charges is considered, some or all of the benefits of a discounted title policy are often entirely absorbed by these other fees charged by the discount carrier. Consider in the category of “closing fees” all other title related charge, whether it be endorsement fees, courier fees, funding fees, etc.
4. Legality. Georgia law states that real estate closings must be handled by attorneys. Some insurers attempt to circumvent Georgia law by sending notaries to perform the document signing. Unfortunately, the out of state title companies universally charge the consumer a closing fee, yet after paying the notary, pocket the difference. Legality set aside, most people want the comfort of knowing that their real estate closing is handled lawfully, and by licensed attorneys.
Because closing fees can be confusing, unwitting consumers are led to believe they can save a bundle when often the savings is marginal at best. In fact, some people actually pay more in fees than they would with their Georgia closing attorney. Moreover, considering the fact that there is not an attorney presence to turn to should problems arise, the benefits of going with a discount company are even more dubious.
Savvy homebuyers who want the best rates on closing costs may want to consider running their numbers through the calculators at http://GeorgiaDiscountTitleInsurance.com. Note on this service, the client would need to make the initial order through the web-based portal.