History of First American Title
First American specializes in financial services for homeowners, including title insurance, valuation, transaction management and home warranties. The company, founded in Orange County, CA, in 1894, operates all across the country and produces annual revenue of more than $8.5 billion. Consumers seldom encounter First American directly, as the company generally works with brokers, mortgage lenders, builders and other members of the real estate ecosystem behind the scenes, and interacts with consumers only during the claims process.
First American Policy Types
Title insurance is distinctive among insurance products for several reasons. First, it covers two separate parties for the same transaction: the sale of a house. When you buy a home, both you (the owner) and the lender (typically, a bank) are assuming a risk that the title, or legal ownership of the house, may be disputable by another party. The title insurance company protects both the owner and the lender from the risk that the title can be contested (for example, by previous joint tenants of the property who did not give their consent to the sale).
Owner's Title Insurance: Buying a house is one of the momentous events in life, and it is doubtful that you pay much attention to title insurance when you sign your paperwork. It is likely that the lender will suggest a title insurance provider, and that you will pay the premium for a lifetime of coverage when you make your down payment on the house, often without knowing whether First American or some other company is your insurer.
The lender will insist that you purchase title insurance before lending you the money necessary to buy the house. So what do you, the owner, get out of First American title insurance? Mainly, peace of mind. If someone shows up to contest the title, or if your ownership of the title gets clouded in some way, First American will pay your legal fees and other expenses. The likelihood of making a claim is slight, because First American thoroughly investigates titles before writing policies. If there were a significant problem with the title, First American would probably refuse to insure it in the first place.
Lender's Title Insurance: Lenders have their own title insurance to insulate them from legal claims. Lender coverage does not extend to the owner.
First American Title's Costs and Fees
One rule of thumb in the industry is that title insurance will cost roughly 1% of the value of the home, though you won't know precisely until the real estate agent or the lender tells you. Title insurance is paid in a lump sum at closing. Depending on your local market and conditions, the seller may pay for the (new) owner's title insurance. This can be a point of negotiation when buying a home.
First American Title's Claims Handling
First American, like other title insurers, pays out only after you incur financial damage from a title claim. There is no predetermined way to know how much of a claim First American will pay, but the company's website relates the experiences of actual customers and gives details on claims, including how much First American paid out.
Contact Information
The sales branch of First American can be reached at 1-800-508-8733 or e-mailed at sales@firstam.com.
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