There are two important entities with regard to title insurance:
It’s important to understand the role each company plays in getting the transaction to close and protecting your title.
The title agency is a specialized entity that handles everything involved with title clearing, in states that do not require an attorney to handle or manage the title process. The title agent’s job is to perform the title search and uncover defects, encumbrances, liens, or other issues with title. The title agent also prepares the documents necessary to remedy any issues that will be a barrier to the closing.
The agency works with the title underwriter to create the commitment and manages the process of procuring the insurance policies for both the lender and buyer from the underwriter. After closing, the title agent is responsible for filing the new deed.
The title underwriter is the insurance company that sells the policies for the lender and buyer. The title underwriter is the entity that assumes the financial risk of uncovered defects with the title arising. If there is a claim, the underwriter is responsible for paying the claim.
The underwriter assesses the risk that there will be a claim, which is a process called underwriting. We provide more insight into underwriting generally, as well as how underwriting occurs for title insurance here.
The underwriter then generates the policy for the lender and owner policies on the property.
The agent and underwriter work closely together in order to deliver a comprehensive title report and an insurance policy that will cover risks related to title. If each plays its part well, the owner and lender can have peace of mind that they are protected should something unknown be brought to light.
Understanding the title clearing process is key to understanding how title insurance policies are created. We encourage you to learn more about title clearing here. Otherwise, let’s continue on and learn more about underwriting and insurance policies.
The information provided in Peak Title Professionals, does not, and is not intended to, constitute legal advice. All content is for general informational purposes only and is not intended to provide a complete description of the subject matter. Specific processes will vary based on applicable law. The title and closing process will be handled by a third-party attorney to the extent required by law. Product offerings vary by jurisdiction and are not available or solicited in any state where we are not licensed.
