Is Title Insurance a scam?
 

We just found out that title insurance is required by most, if not all, lawyers and settlement companies around The Villages. I don't see the need for it since The Villages purchased all the land and I'm sure did their due diligence in the purchase. Does anyone else think it's a way to collect thousands over and over again each time a property changes hands? If you know anyone who will do a closing without it, please let me know.

Title insurance
 

I agree with you. I rejected it at closing, two years ago, and believe it is another trumped up fee (Sorry, Donald), like "courier" and the like. If somebody some day files a suit over property rights, the developer will have to answer. He bought the property and subdivided it. Another thing, I read an article a while back that claimed there are only two or three title insurance companies in the U.S. They operate under a variety of names.

The interesting thing is that when you purchase a new home through the developer, you have a choice about buying title insurance. When you are selling your home in TV, you are required to buy title insurance for the Buyer. The attorneys and title companies in this area tell you that this is "customary" in Florida, but that is not the case. I sold 4 properties in other parts of Florida, and was not asked or expected to purchase title insurance for the Buyers. Incidentally, the attorney and/or closing agents earn up to 40% of the title insurance premium as their "commission" for writing the policy.

All insurance is a scam until you need it.

It is expected, but not a requirement that when you sell, the seller purchases title insurance. We did a for sale by owner and stipulated we would not pay title insurance. The buyer could purchase it on their own if they chose. They opted not to.

McLinn Burnsed said they would not close a transaction without it. Does anyone know of a settlement office that will?

The State of Florida doesn't have a state income tax so they get money many other different ways. Closing costs are are much higher on a home in Florida than another State. Title insurance is a "profit making golden goose" for the Title Companies. It pays the rent!

OP, I always figured Title Insurance as a cost of owning property the same as Homeowners insurance. It is called Insurance and I'm sure neither of us would be without insurance on our home---although we may never use it.

The only reason a law office or title company would not close a sale if you opted NOT to buy title insurance is because the Lender requires it to cover their mortgage amount (NOTE: the mortgage amount - not the total amount of the sale. Otherwise if you are paying cash, they may make you sign a waiver that you were properly informed of the risks...so sign it then you are taking the risk.
Its a buyers concern not the sellers.

However that said, on a resale, it may be wise for the buyer to get it, but for a new home bought from the developer paying cash...I don't think it is necessary..

There are two different Title Insurances. One covers the bank and one covers the homeowner. The bank insurance is mandatory. Homeowner's is optional. I'll be closing on July 22 and I'm thinking of rejecting it.

I just looked at my paperwork. The cost for lender's title insurance is $25.00. The cost for homeowner's title insurance is $1,005. Huh? Same coverage.

When we closed on our property the seller paid for the title insurance ($975.00).

I have always believed title insurance in Florida was a racket. Where I come from, NY, you generally use a lawyer to close and that lawyer does a title search. If he screws up, you sue him for malpractice. You don't buy title insurance. There was only one title company covering about ten counties doing mainly commercial transactions. Here, you probably have 100 title companies covering every 10 counties. It's a rip off and these title companies have zero interest in you as your own lawyer would!!

I closed last sept. and did not buy title insurance,new house.

There are people who believe in title insurance; some don't. Nuff said?

You are correct about the two Insurances. As my lawyer friend says, you always want to avoid paying lawyer fees for litigation. I don’t believe the Developer would be of any help and certainly don’t want to sue them( The Developer) as they have more money to spend on lawyers than I . So, I added the personal one which was around $327.