Why You Should Rethink Opting Out Of The Owner’s Title Policy.

 

A Little Bit About Me First

 


My name is Geoff Harris and I am the state agency manager for North American Title Insurance Company, domiciled in Florida, with more than 20 years in the title industry.

With a BS in Biology from Indiana University and being pre-med, I knew the closest I was getting to medical school was to marry a doctor. Additionally, the best part of my degree I got to use was the BS!

What began as an opportunity to do marketing (whatever that meant) for a title company in South Florida in the mid 90’s, turned into a place to learn a lot about our industry. From selling title, to processing files, to closing files, and eventually leading into management.

After learning what I felt was a lot in the title world, it led into a role for a survey company in Florida. This led me to grow that into the largest survey company in the state, until I decided to leave that operation and start my own. Years later I was approached by an underwriter to help them grow and support their South Florida agencies. I didn’t know much about the underwriter role, so I happily jumped into that challenge as well. 18 years later I still have the drive to learn!

What Is A Title Insurance Policy and Why Do I Need One?

 


Oftentimes people ask me why they should buy a title insurance policy, and frankly it says right on the Closing Disclosure that it’s an “optional purchase”. Here is what I would like to educate new home-buyers about. If nothing else, think about the immense coverage they get by purchasing an owner’s title insurance policy. Firstly, if you get a loan, the lender will require it. Clearly the lender wants to protect their investment in the asset, shouldn’t you?

More importantly, if you do have a loan, and let’s just say it’s an 80/20 loan, and you are purchasing a $500,000 home. The lender will require the lender’s policy for their loan amount, which is $400,000, and you would pay the difference between the two policy amounts. You aren’t paying for a $500,000 policy in addition to the lender requiring you purchase a $400,000 to cover them, you are merely paying the spread of the policy for $100,000, plus maybe an extraneous simultaneous fee of $25 or more.

However, instead of getting $100,000 of coverage, you actually get $500,000 of coverage for that same property, yet you are only paying about 20% of the policy. Even worse, if the lender requires the lender’s policy for $400,000 and you opt out of purchasing the owner’s policy, you actually have zero coverage for title insurance and could have a total loss. In Florida, the rates break down as follows so you can see it in a table to better understand with the above mentioned scenario:

Owner’s & Loan Policy = $2,600
Loan Policy Only =$2,075
Owner’s Policy Costs =$525 additionally.

 

In the next segment I will share a few anecdotal stories of claims and issues that have arisen which will make you realize how title insurance is the cheapest insurance policy with the best coverage you will ever have. Aside from the fact that you buy it once and it covers you for the entire time you own your home.

Have Questions? Reach out!

 

As someone who tries to think outside the box, this is a difficult industry to navigate and work through, which is what makes the challenges it brings even greater. However, after learning many facets of our industry through great leaders, partners, friends, and relationships within the industry, I have become someone who knows more about the supporting roles in our industry than most.

Additionally, as a small business owner, it has also helped me become the best business consultant to my existing clients in helping streamline, grow, and manage their own businesses.

I love helping others, and I constantly like to teach. I like to think that I help innovate different facets throughout our industry, and as such I am always an available resource to anyone in the industry.

I am always available, and happy to help anyone who has any questions or concerns. I always say, there is no such thing as a stupid question, and the only bad question is the one you don’t ask! Feel free to reach out to me anyime, GHarris@NATIC.com, or via my direct line 305-310-5173.

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