02/22/24

Does ChatGPT know title insurance? We put AI to the test!

Just like Usher, we have a confession (just one, no second part): This blog post was written with an assist from artificial intelligence. That’s right, we used ChatGPT to round up five things homebuyers should know about title insurance.

Here’s how the robots answered our prompt of “What are five things buyers should know about title insurance?” One note: We edited the response a bit to make sure it was accurate and made sense for our customers, but overall, the AI’s initial effort would get a B if this was the classroom. Our editor also added links for context and more understanding – proving a human touch is always needed.

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Title insurance is an essential aspect of the homebuying process that safeguards buyers from potential issues regarding property ownership and title disputes. Here are five key things buyers should know about title insurance:

  1. A policy provides protection in case of future ownership disputes: Title insurance protects buyers from potential legal disputes related to property ownership. It and the accompanying title search (more on that later) ensure that the title of the purchased land is clear of any known undisclosed liens, encumbrances, or anything else that may cause a dispute down the line. In other words, title insurance isn’t the same thing as, nor a replacement for, homeowners insurance. Instead, a policy is the best way to know that your ownership rights of your homes are protected now and in the future. 
  2. Coverage for Past Issues: Unlike other types of insurance that provide coverage for future events, title insurance can cover consequences from past occurrences, such as undisclosed liens, errors in public records, or fraudulent transactions that could affect the property’s title. Around the industry, our fellow professionals like to say title insurance protects you from past issues causing future problems that haven’t been uncovered yet. 
  3. There are two types of title insurance – an owner’s policy and a lender’s policy: Lender’s title insurance protects the mortgage lender’s investment in the property, while owner’s title insurance protects the homeowner’s equity and ownership rights. If you have a mortgage, your lender will be covered, but the smart choice is to have an owner’s policy, too.
  4. You only have to pay for title insurance once: That’s right, there’s no yearly premium, even though your policy lasts as long as you – or your heirs – own your home. The one-time fee for your policy is based on the property’s value and is included in your closing costs. Whether the buyer or seller pays for it is normally based on what state your property is in, but it can be a negotiating point, too. 
  5.  We’ll do a vital title search as part of your closing: Before issuing a title insurance policy, a title company (that’s us!) conducts a thorough title search and examination to uncover existing issues with the property’s title. This process helps identify and resolve potential concerns before the sale is finalized, minimizing risks for the buyer.

The aim of this piece is two-fold. 1) To educate more on title insurance and 2) to show our real estate partners that AI can be a tool worth using if you monitor and modify what is generated. Want to use ChatGPT to the best of its ability? Here are some recommended real estate uses and tips on writing the best prompts.

Have more questions about title? We’d love to talk to you further about this topic – after all, it’s one of our favorites. Reach out to one of our branches today!

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