Closing the house? 5 things you should know about hidden fees in property insurance

Title insurance is not something most people know about - until they are in the throes of buying a house and signing a stack of papers at a lawyer's office. The insurance is designed to protect your lender, in case a legal battle arises over your right to own the property. A second, optional rights policy is designed to protect you, the homebuyer.
But a WBUR investigation found that the person selling you the two policies reaps 80% of the cost, which is several thousand dollars. In Massachusetts, that person is your real estate attorney. And there is no requirement for lawyers to disclose that they make money on the insurance.
Here are five important points from the story:
1. In Massachusetts, only real estate attorneys can be title agents.
In most cases, your real estate agent or mortgage broker will recommend a real estate attorney to handle the closing. You do not need to hire this lawyer; You can hire one you know and trust.
The attorney makes sure the title search on your property is accurate and files documents with county officials. If there is a problem with the title – such as a tax lien against the seller or a probate of the property – it's your attorney's job to resolve it before closing.
2. The second policy is technically "optional", but most people buy it.
If you get a mortgage, it is mandatory to buy title insurance for the lender, in case something goes wrong with the title later. The second policy, for you, is optional. But most lawyers will strongly advise you to get it, because the first policy protects the bank or lender, not you.
3. You can ask your attorney what percentages they make on title policies.
Attorneys earn commissions on both the lender's title policy and the optional homebuyer's policy. Their standard split is 80%. This is in addition to other fees for representing you and handling the title and settlement. (Lawyers no longer have to disclose on mortgage documents how much they earn on title policies. If you ask and a lawyer refuses to tell you, let us know.)
4. Most title records are available online, but you still want a professional to check them when you're buying a home.
Although rare, problems with headers can pop up. If you're curious, you can find public property records at masslandrecords.com. But you pay your lawyer to make sure the search is thorough.
5. Massachusetts regulators do not oversee title insurance or monitor rates for consumers.
There is no help regarding the right rates at the State Insurance Division, which regulates other types of insurance such as auto and medical. You can look up rates on various calculators available online. But in general, real estate lawyers recommend their preferred insurer.

No one wants to feel unsafe when making a huge investment like buying a home. The question is why insurance costs so much, and why state regulators are not doing more to protect consumers