Title Insurance in North Carolina
Rates 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 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. The title insurance fee you see on your settlement statement is composed of your premium and service fees, if any.
The North Carolina Marketable Title Act requires attorneys to examine title for a period of no less than thirty (30) years, absent specific exceptions. Exceptions may allow for an attorney to bypass cumbersome procedures to adequately satisfy recorded liens of prior owners or accounting for easements and encroachments that may impair the buyer’s enjoyment of the property.
Title 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.
When buyers are not seeking mortgage financing, we strongly suggest obtaining owner’s title insurance to protect their interests in the property from title defects.