Title insurance and the associated terminology can be confusing stuff. One of the terms you may come across as you learn about your title insurance options for protecting your investment in your property is bifurcated title insurance—a no-cost-added option that opens up choices to buyers and sellers that were not available in the past.
You Have the Right to Select Your Title Insurance Company
As you know, title insurance protects both lenders and property buyers against potentially hidden encumbrances, defects or liens in a property title—the kind of hidden information that requires the expertise of a team of researchers to ferret out. As a property buyer, you have the right to choose the title insurance company you want to work with. Bifurcated
Understanding Bifurcated Title Insurance, or a Split Closing
There are two types of title insurance. Lender’s insurance protects the bank or lending institution, in the event of a title defect. Owner’s insurance protects the property buyer in the event of a title defect. Both the owner and the lender can choose their own title insurance company, and at times the two select different title insurance companies for the job. This is called bifurcated title insurance. (To bifurcate is to divide into two parts, per Merriam-Webster.) Since a bifurcated sales transaction is handled by two companies, it is sometimes called a split closing.
Special Considerations for Bifurcated Title Insurance
In the event that you and your lending institution do select different title insurance companies, you will need to determine which title company is performing certain responsibilities, such as recording the documents, holding any escrows and of course handling closing.
Traditionally closings, whereby one title company one title company insures both sides of the transaction, can be convenient, but in today’s busy world, what is convenient for one party may not be for another. In the state of Wisconsin, title companies may offer a simultaneous issue rate for lender policies on bifurcated closings, so buyers will not incur any additional cost if they choose a title company different from the one the seller has chosen.
Exercising Your Right to Choose a Title Insurance Company You Trust
Remember, it is your right as a property buyer/owner to select the title insurance company you prefer, and no lending institution can require you to choose their title insurance company. It’s vital to select a company you can trust to protect your assets. In the long run, you’ll have the peace of mind that comes with knowing there are no unwelcome surprises coming with your property purchase.