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Comment by choppaface | Hacker News Reader

And title insurance

Of all the scams associated with real estate transactions, title insurance is kind of legitimate. The title chain itself may be recorded, but there may be some lien against the property that was not properly recorded. That’s the situation you protecting against.

Now whether that’s worth .5-1% is debatable.

I’m pretty confident that payouts from title insurance don’t even reach 10% of the premiums collected. That’s my definition of a scam.

> Of all the scams associated with real estate transactions, title insurance is kind of legitimate

As someone who has submitted (and failed to collect) on a claim against title insurance for legal fees incurred to correct a mistake in the original title that the title company missed, I'm skeptical of its value, at least for things like erroneous lot lines.

What was their reasoning for not paying out?

They claimed that they had correctly interpreted the documents as presented. The issue was that my condo (in a 2 unit condo building) hadn't been correctly deeded one of the 2 parking spaces, even though the building was designed and used that way for decades.

They claimed that the seller misrepresented the property by claiming it came with a parking spot.

Oh don't get me started on title insurance in Texas! It gets prorated depending on the last time you purchased or refinanced the property, but it has to be renewed every 7 years! Mind you 7 years ago they checked and verified it was good, so why do I need to renew when we know there are no issues with the title? If you notice, most title offices are very nice, beautiful buildings, fancy furniture and furnishings. That is what you are paying for!

Title insurance is a real thing, but it is wildly overpriced for the actual risk.

I hear they basically never payout in the event of a problem

Does anybody know of someone making a successful claim with Title Insurance? I've long been skeptical about how often those situations happen.

I’ve read stories of it happening but title insurance refuses to pay

The seller really should be liable for all of that

Yes, but if you only discover a decade later and the seller is long gone...

If so then there are laws to consider that any property that is not protected becomes legally owned by the one who has been servicing/inhabiting it, which is a bit before that decade would end.

The core problem of the lien is solved, the only thing left is to ensure the lawyers who seem to always get their cake no matter what aren't bloodthirsty enough.

They'll just pass the cost on to the buyer in the price.

I feel like we have had electronic databases with backup capability for so long that errors in titles should have long been a thing that does not happen anymore.

I did computer support and had a couple of title companies all though the 2007 boom and 2008 crash. I may seem impossible, and yet suits brining up chain of title going back into the 1800s do happen more commonly than one would think.

In the rural south there are some insane claims of title across families. I've seen title work where they had thousands of pages of paperwork involved with hundreds of possible heirs that had to be located.

Same thought. You'd think title insurance would only kick in if the last title transfer predates say 1980, or some other relatively-likely-to-have-county-digital-records date

My parents bought a house in ~2003 new from the builder that ended up having a title issue when they tried to sell it (work orders of some kind)... in a big city that I certainly assume was using digital records by then.

And the underbody coat that totally failed to rustproof my home

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