Title Insurance May Be
A Smart Investment - Part 3

The Denninger Report  - by Gini Denninger

So, having lived in this home for ten years, the homeowners were stunned to learn that the nephew had a legitimate claim on the property. A court battle ensued, costing thousands in attorney fees, but the buyers were covered due to having bought both forms of title insurance. Unfortunately for them, the court decided that indeed, the nephew did own the home and that it was improperly sold. The nephew, suddenly having a nostalgic bend towards his uncle, decided he absolutely MUST live in the home and the buyers had to leave. 

The buyers mortgage company was paid the money that they insured for. And because the buyers bought the Fee Title Insurance Policy, they too were covered, and were paid the money that they put down on the property. Since they also bought the Fair Market Value Rider, they were also covered for equity in the property. Because they were covered, they were able to put their lives back together and buy another property quickly and get on with their lives. Had they not bought the Fee Title Insurance Policy, they would have lost their down payment and closing costs, which can be considerable in some cases. Having additionally bought the Fair Market Value Rider, the buyers were able to capitalize on the large increase in value over the ten years they lived in the property. The Market Value Rider covers increases in value due to market increases (inflation) but not improvements to the property - so the cost of any improvements such as a new sunroom, would not be recouped. The buyers financial damage was kept to a minimum and they were able to recoup quickly. 

Wade Radtke, a sales account manager for Chicago Title Insurance Company here in Rochester, told me a story. At an event, a Realtor accosted him, decrying the waste of money title insurance poses to buyers. Wade defended the need for title insurance by recounting to the Realtor a personal experience. Wade is a firm believer in title insurance, not only because he sells it, but because it saved his father from a loss in real estate value. His father had bought a property. Eventually, a property line dispute arose. His father lost and in the process lost three acres. He was covered though, through the title insurance he had taken out and so was able to recover the value of the three acres and was also protected from the legal fees spent defending his position.

Now that you have read this article, perhaps you realize you that do not have the Fee Title Insurance Policy or Fair Market Value Rider. It is not too late. You can get these insurances, as long as you are not currently experiencing a challenge to your ownership of title to a property. Contact your trusted real estate attorney and ask them for a recommendation on who to contact to set it up or look online for title insurance companies. There are quite a few companies ready to work on your behalf. If you are unsure whether you have a Fee Title Insurance Policy, contact your attorney and ask them to review your documents. To be fore-warned is to be protected, as long as you take action!



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