Home Title Monitoring Service vs Title Insurance
It seems that on a weekly basis, that I receive questions from title agents, friends, or REALTORS asking about a company that provides a home title monitoring subscription service. The home title monitoring service does not claim to be title insurance or a replacement but provides a service to alert the homeowner of any fraudulent activity that relates to the title of the property. If fraud does occur, the monitoring service will provide resolution experts to assist in resolving the matter for its members. A standard owner’s title policy does not monitor or typically provide any protection for issues that occur after the date of the policy. (Remember, title insurance is risk elimination versus risk assumption). Under a standard owner’s policy, coverage is for issues that occur prior to the date of policy versus after the date of the policy. This is different than traditional insurance, such as insurance for automobiles or homeowner’s property and casualty insurance. Traditional title insurance does not offer monitoring services to detect fraudulent activity. Currently, only 26 of the 82 counties in Mississippi offer online recording services and it would be difficult for a service to monitor recording activities remotely.
A standard ALTA Owner’s Policy is available for a one-time fee and protects your property rights while you own your home. It protects the insured homeowner from unforeseen title issues, unrecorded liens, unknown heirs, and other matters that arose prior to acquiring a title that is not otherwise excluded from coverage. It provides the homeowner with peace of mind that a title company can defend your property rights. If an ALTA Homeowner’s Title Insurance Policy is purchased, then in addition to coverage for matters that arose prior to the date of the policy, the insured would also have coverage for certain matters that arise after the date of the policy.
Cost
Title monitoring services offer their services on a recurring subscription basis. For example, some charge $14.95 a month or $149 annually. Owner’s title insurance, on the other hand, is available for a one-time fee based upon the value of the home. Assuming an average home price of $200,000 and a loan amount of $180,000, a homeowner could purchase an owner’s title policy along with the simultaneously issued loan policy for $900.00 for both policies. This may seem expensive, but most lenders require a loan policy ($540). Therefore, to truly compare the cost you must look at the cost of the incremental charge for the owner’s policy, which would be $360.00. If the homeowner purchased an ALTA Homeowner’s Title Insurance Policy, then the incremental cost for the additional coverage would be an additional 20% or $160.00 Let’s compare the cost below:
| Year 1 | Year 5 | |
| Title Monitoring Service | $149 per year (recurring) | $149 per year ($745 total) |
| Standard Owner’s Policy | $900 One-time Fee ($360 above cost of Loan Policy) | $0.00 |
| ALTA Homeowner’s Policy | $1,060 One-time Fee ($520 above cost of Loan Policy) | $0.00 |
Considerations
If you are in the process of purchasing a home (new or pre-existing) or refinancing and if you have concerns regarding fraud, forgery, or title theft, then you should consider purchasing an ALTA Homeowner’s Title Insurance policy rather than a title monitoring service. The home monitoring service is a costly, monthly or annual subscription. Although they offer “additional” services to help remedy the title issue, they do not pay them off or satisfy the fraudulent lien or mortgage. The ALTA Homeowner’s Policy provides the highest levels of protection available to homeowners. Subject to the conditions in the policy, some of the covered matters included with an ALTA Homeowner’s Title Insurance Policy are:
- Post-Policy Forgery*
- Post-Policy Encroachments by Neighbors*
- Post-Policy Adverse Possession*
- Post-Policy Easement by Prescription*
- Someone else owns an interest in your title
- A document is not properly signed
- Forgery, fraud, duress in the chain of title
- Defective recording of any document
*Post-Policy coverages are only available with an ALTA Homeowner’s Title Insurance Policy. The Homeowner’s property must meet qualifications to be insured under this enhanced policy.
Homeowner’s should contact their local licensed title agency or title company to inquire about the availability of an ALTA Homeowner’s Title Insurance Policy.