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| What
is Title "E and O" Insurance Anyway?
Errors & Omissions coverage, or E&O
for short, is also called professional liability insurance. Title
Underwriters
will require
title agents to carry this insurance, as it protects title agents
from losses as a result of lawsuits or claims due to an alleged error
in any part of the title documentation (searching, escrowing, etc)
process. It is important to realize, however, that this coverage
is not just a requirement. You are buying protection, and that protection
extends much further than just payment of a settlement or claim.
The coverage you purchase not only pays the final settlement (up
to your policy limit), but it also includes payment for defense costs.
By carrying the protection that an insurance policy provides, you
leave yourself free from the financial devastation associated with
the defense of a lawsuit.
|
How
do you get it?
It's easy to get started. Call me, or submit your information online
and I will call you! Also, you can simply download the application
on this page, complete it, and send it to me. I use a comprehensive
application that has been carefully crafted to address all aspects
of a title agent's job- including escrowing, searching (even if you
are hiring independent searchers), and title insurance. My broad
access to various insurance companies allows me the ability to submit
your account to the ones best suited for your agency needs. Then,
I will present these options in an excel spreadsheet format, making
it easy to understand and compare coverages. I will sit down with
you, go over your options, and help you make an educated decision.
You are paying for this coverage to do business- it should protect
you if you have a claim! |
Think it can't happen
to you? Here are some recent Claims Examples:
A
title examiner did not locate 3 mortgages recorded as liens
against
a property. All 3 mortgages were of public
record, but
they were
filed between the examiner’s title search and the loan closing.
At the loan closing , the examiner did not update his search, and
the seller did not disclose any existing liens against his property.
Thereafter, an owner’s title insurance policy was issued
to the buyer without exception to the existing mortgages. The lender
began foreclosure proceedings against the buyer, who filed a title
insurance claim under his owner’s policy for $320,000 in
damages sought by the lender. The title insurance company pursued
reimbursement
from the title examiner.
A
2nd mortgage of $174,000 was not paid off at closing. The loan
closer was aware of the existing mortgage, but believed it could
not attach to the property because it was recorded as a personal
lien. The seller, who also was aware of his outstanding 2nd mortgage,
pocketed funds at closing that should have been used to payoff
his 2nd mortgage. A foreclosure action was later brought against
the purchaser, who filed a title insurance claim. The title insurer
in turn brought an action against the loan closer. Although the
seller received funds intended to payoff his 2nd mortgage, he
disappeared and could not be located by claim investigators or
police. Therefore, the loan closer was held accountable for $214,000
in total damages.
A
loan closer performed a closing for a refinance. Instead of obtaining the payoff
amount of the existing mortgage, he calculated it
himself. It was incorrect, and the existing mortgage was not
satisfied. The E&O insurer settled for a total loss of
$36,500.
Often, a claim or lawsuit may not involve a clear error or
omission on the part of the title agent, abstractor or escrow
agent. There
could be a title
hazard on a property, but the title insurer may not be responding to the
claim because it is not covered. As is normal with insurance
agents E&O, the
agent will likely get named in any suit by the policy holder against the
insurer. |
Steve
Goldstein, from
Trans County Title Agency, LLC says
"Robin
not only saved money on my policy, but she gave me different options,
and explained why the carrier she chose for my agency was the best. Now
I'm fully protected and paying over 20% less than last year!" |
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