Page 10 - WERC Mobility - December/January 2022

Insights

Why Title Insurance Is

Important in Relocation

BY FAYE S. HOXWORTH, CRP, GMS | ASSISTANT VICE PRESIDENT & STRATEGIC
OPERATIONS MANAGER | OLD REPUBLIC RELOCATION SERVICES

itle insurance may be a service that’s Too often, the transferee will decide not to
often lumped in with real estate costs purchase an owner’s policy to cut costs. As trans-
and fees overseen by a relocation ferees are often relocated more than once by their
T management company. Still, it plays employer via a typical relocation homesale trans-
a key role in the relocation process, and companies action, forgoing owner’s title insurance could prove
should understand the implications of forgoing this highly disruptive to subsequent transfers. It also
coverage that protects the transferee. places the burden of resolving any title issues, prior
Simply put, title insurance protects your trans- to each new acquisition, on the employer or reloca-
ferees’ largest investment—their home. It covers tion management company. A few examples of title
financial loss or legal expenses up to the face defects that can cause issues include: unreleased

amount of the policy if there is a defect in title liens against the property, such as mortgages, judg-

to the property. Title insurance is different from ments, and tax liens; defects in a prior transfer of
other types of insurance because it focuses on risk the property; and outright fraudulent documents.
8 prevention, not risk assumption. Title examiners Our team regularly helps resolve title defects such
review the property’s history and try to eliminate as these, tracking down and negotiating with former
worldwideerc.org ance also comes with no monthly payment—it’s or affidavits to make the title marketable. An owner’s
owners and interested parties to sign releases, deeds,
title issues before the policy is issued. Title insur-

just a one-time premium paid at closing.
policy is often the first and most important tool in
obtaining a timely, favorable outcome. Without it, the
There are two types of title insurance policies. First

transferee must absorb the cost of clearing the title.
is a lender’s policy, a required purchase on most mort-
gage transactions that ensures the lender has a valid,
enforceable lien on the property. More importantly
the property may be ineligible for a homesale benefits

to transferees, an owner’s policy is an optional policy And if clearance is not completed in a timely fashion,
program, requiring the transferee to sell the property
designed to protect the homeowner from covered title outside the relocation program.
defects that existed before the policy was issued. We strongly encourage review and consideration of

owner’s title insurance as a covered benefit in the real
TITLE INSURANCE AND RELOCATION estate component of any mobility program. Not only
In a typical relocation homesale transaction, the does owner’s title insurance protect transferees’ interest
purchase of an owner’s policy is covered if the seller in the property, it also protects employers’ investment
in that state customarily pays for it. However, in in their talent. Your title and closing services supplier
a home purchase transaction in a state where the can provide education and insights on best practices
transferee/buyer customarily pays for an owner’s to prevent and, where necessary, resolve title issues as
policy, it is not typically reimbursable under the they arise. Educating transferees on the importance

benefits policy because it is not a required expense. of purchasing an owner’s policy can open a dialogue
on ways they can protect themselves and improve
outcomes in any subsequent transfer.

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