[gumby]

The last time I bought a house (this was in California) I read the title insurance policy (as the author says, it's short). Turns out it protects my claim in perpetuity meaning that when I sell the property I am still covered against any claims later brought by the buyer or their insurance company.

Obviously therefore I don't need the insurance: in the very unlikely case title might be challenged I can always just sue the policy of the (now deceased) people who sold the house to me.

The title company of course did not like this. More importantly: they were the one conveying the title (a lawyer doesn't do this as happens in some other states). They said "we earn our money on this and if you don't buy the insurance we won't convey the title" (i.e. complete the change of ownership). And at least around here in Palo Alto only the title insurance companies handle this, at least according to my real estate attorney.

So basically I was required to pay an extra few hundred bucks for nothing. A true "junk fee".

[throw0101b]

> Obviously therefore I don't need the insurance: in the very unlikely case title might be challenged I can always just sue the policy of the (now deceased) people who sold the house to me.

Title insurance, at least in Canada, also protects against future actions, and not just past ones:

* If someone manages to do some shenanigans and convinces someone that they own your property, and gets a second mortgage/HELOC on it, and then not pay it back, which causes the mortgage/HELOC company to put a lien on it, title insurance protects against that.

* If someone manages to sell your house to a person who then shows up at your front door on the "closing day", expecting to get inside, title insurance protects against that.

The above can happen even though you own things properly, and got them properly from the previous owners.

Occurrences in Canada:

* https://www.cbc.ca/news/canada/toronto/prevent-title-insuran...

* https://www.mannlawyers.com/resources/a-review-of-title-insu...

[ensignavenger]

I guess they could have just charged you a fee for conveying the title equal to what they would have earned on the insurance premium, did you ask them yhem to do that?

It is pretty silly if CA requires a title company to do that. I have transferred titles in my state myself, here, I just take the title to the county and pay a small fee to have it recorded.

[formerly_proven]

> So basically I was required to pay an extra few hundred bucks for nothing. A true "junk fee".

Over here it’s 2% plus 5% transfer tax plus generally 3.5% for the realtor (matched by the seller).

[RecycledEle]

The Statute of Limitations might make "in perpetuity" mean a few years.

I doubt you could sue the previous owner's insurance policy.