Title Insurance in North Carolina
Premiums are regulated by the NC Department of Insurance.
In North Carolina, residential mortgage lenders require borrowers to obtain a lender’s policy of title insurance, based on the attorney’s opinion that the loan is free from unacceptable liens and encumbrances. This is paid as a one-time premium based on the sale price or loan amount. Owner’s coverage is paid based on the property purchase price, while lender’s coverage is charged based on the loan amount. If you are purchasing a home with a mortgage at our office, you will need to acquire both an Owner’s Policy and a Lender’s Policy.
Title insurance rates apply to ALL title insurance policies issued for property located within the state, regardless of which title insurance company issues the policy. Unlike most other states, in North Carolina rates are fixed whereas other states allow insurers to set the rates and do not require explicit approval by the Department of Insurance.
Title insurance can cover loss that may arise from a lien or encumbrance on title resulting from title defects.
Title insurance can only cover known title defects which are reported by the attorney to impair the ownership interest in real property. Defects are often not found until years after the purchase, when the new buyer’s attorney reveals unresolved matters preventing the property from being sold. Title defects should ideally be addressed prior to entering contract, but not later than expiration of the due diligence period to avoid delaying the closing.
The primary concern that property owners should beware of when selecting an attorney is their diligence in investigating a prior title policy to determine if any prior exceptions are not suitable for the buyer’s intended use.