Title insurance... is it worth it for DVC?

[TinyTGO]

After reading my title policy on my last purchase, I felt like it really didn't protect me from anything. If the seller was able to transfer points out between closing and point allocation, or if the seller takes a loan out against the points after closing title insurance doesn't protect you. It only protects you if the seller had a lien against the points prior to closing or if the seller was not authorized to sell. The second part is verified by Disney, and the first part seems unlikely to happen... who files a lien against a timeshare?

This is all my understanding... can anyone else add some insight or personal experience?

 

[Dean]

After reading my title policy on my last purchase, I felt like it really didn't protect me from anything. If the seller was able to transfer points out between closing and point allocation, or if the seller takes a loan out against the points after closing title insurance doesn't protect you. It only protects you if the seller had a lien against the points prior to closing or if the seller was not authorized to sell. The second part is verified by Disney, and the first part seems unlikely to happen... who files a lien against a timeshare?

This is all my understanding... can anyone else add some insight or personal experience?

As I've said many times, the answer is no for most situations. If you're not dealing with a split family or bankruptcy situation and there are no liens, you should be OK. While it isn't expensive, it's usually wasted money. It's a little like travel insurance. The other situation is for larger or more expensive contracts. I'd bought a number of timeshares over the years in the $16-20K range and never bought it where I had a choice. I only recall one instance where it was applicable and helpful but I don't recall the details. You might search on TUG about this issue. You'll get lot's of opinions for every direction from mine to it's cheap and why take the chance.

 

[mustinjourney]

I came to the same conclusion as you did with respect to title insurance. Seemed unnecessary to me.

The other issues you discuss are much more likely to happen. Which is why in the contract -- make sure that there is a clause stating that if there are any missing points, they are valued at $16 per point and the amount will be subtracted from the amount the seller gets at the end.

This happened to someone a few months ago, and they didn't have a clause like that. It became a huge headache for them. They had to either walk away, take it as is, or try and negotiate a value of the lost points. Not an ideal situation.

 

[rothesay]

Wish I would have read this thread prior to closing.

 

[DVCRad]

I think the biggest racket is that DVC will by default sell you title insurance with a direct purchase. We just signed a direct Riviera co tract and it had title insurance on it and it said it was optional. I can’t think of anything it would do for me other than pad Disney’s pockets. It’s not like Disney is going to come back with a secret lien or prior divorce where this asset is now in play.

 

[DVCanadian]

Captain Obvious reporting in: All insurance is wasted money until you need to use it, or wished you had it.

 

[tommcp516]

My loan estimate includes the following (for a resale purchase):

Title-Wire Receiving Fee: $20
Title-Recording Service Fee: $9
Title-Lenders Title Policy:$217
Title-Settlement Agent Fee: $350
Title-Title search: $50
Title-Owner's Title Policy: $217

By my count that's $863. Are any/all of those charges optional?

 

[DVCRad]

If you are the buyer you can shop around for different title companies that may give you a better rate. Whoever pays for closing costs gets to chose the title company.

The only item on there you could probably drop is the Owner's Title policy. However, if I bought resale I would keep it as you never know if the seller has an outstanding lien you don't know about or a prior divorce that will bring this asset into play.

 

[Hjs33]

After reading my title policy on my last purchase, I felt like it really didn't protect me from anything. If the seller was able to transfer points out between closing and point allocation, or if the seller takes a loan out against the points after closing title insurance doesn't protect you. It only protects you if the seller had a lien against the points prior to closing or if the seller was not authorized to sell. The second part is verified by Disney, and the first part seems unlikely to happen... who files a lien against a timeshare?

This is all my understanding... can anyone else add some insight or personal experience?

I bought a contract and 20 points were missing when Disney loaded the contract. The resale company reached out to the sellers, but they just ignored their calls. I also reached out to the title company and they did not seem to care. In the end the resale company transferred 20 points into my account to fix the issue. But you are correct, I don’t think title insurance comes into play in this type of situation.

I’ve bought resale half a dozen other times before and never had this happen. Going forward I’m going to request something in the contract saying how much the seller owes per point if any points are missing.

 

[DVCRad]

I bought a contract and 20 points were missing when Disney loaded the contract. The resale company reached out to the sellers, but they just ignored their calls. I also reached out to the title company and they did not seem to care. In the end the resale company transferred 20 points into my account to fix the issue. But you are correct, I don’t think title insurance comes into play in this type of situation.

I’ve bought resale half a dozen other times before and never had this happen. Going forward I’m going to request something in the contract saying how much the seller owes per point if any points are missing.

This is a must! Most of the resale contracts have had this penalty written into it when I have sold my contracts. I know that the board sponsors do at $20 a point. I'm currently selling a contract with them and it was in the contract.

 

[DVChris]

I bought a contract and 20 points were missing when Disney loaded the contract. The resale company reached out to the sellers, but they just ignored their calls. I also reached out to the title company and they did not seem to care. In the end the resale company transferred 20 points into my account to fix the issue. But you are correct, I don’t think title insurance comes into play in this type of situation.

I’ve bought resale half a dozen other times before and never had this happen. Going forward I’m going to request something in the contract saying how much the seller owes per point if any points are missing.

I always ask escrow for a screenshot of their dashboard before I sign the final docs.

 

[eandt]

I think the biggest racket is that DVC will by default sell you title insurance with a direct purchase. We just signed a direct Riviera co tract and it had title insurance on it and it said it was optional. I can’t think of anything it would do for me other than pad Disney’s pockets. It’s not like Disney is going to come back with a secret lien or prior divorce where this asset is now in play.

I just looked at both of our direct contracts and see Title Insurance on there as well. I had no idea this was optional or I would have had them remove it. Didn't amount to a lot but money in my pocket is a lot better than money in the mouse's ..... I feel cheated now, will never happen again though.