Barb Szabo's Blog

What is Closing Protection Coverage?

Shortly after a contract is signed, title work on the property will begin. Soon after, both the buyer and the seller will receive a letter from the title company letting them know that Closing Protection Coverage is Available to them.

Sarah Minneman, a title rep from North Star Title was kind enough to forward the following explanation for Closing Protection Coverage. In my opinion it is a small price to pay for peace of mind until your transaction is closed.

 

Pursuant to Section 3953.32 of the Ohio Revised Code, effective January 1, 2007, every real estate closing involving real property in Ohio in which title insurance is to be issued, the title insurance company or title insurance agent must offer closing protection coverage to the lender, buyer/borrower, and seller in the form of a Closing Protection Letter mandated by the Ohio Department of Insurance.

If the lender chooses to elect Closing Protection Coverage, a premium of $35.00 payable to the insurance underwriter will appear on the settlement statement. If your borrower also elects coverage, the charge will be $50.00 ($35.00 for lender's coverage and $15.00 for borrower's coverage).  If a Seller chooses coverage their charge will be $50.00.   The coverage is limited to the specific transaction and is described on the Notice of Availability, an excerpt of which follows: 
Description of Coverage
 
The Closing Protection Coverage indemnifies you against the loss of settlement funds resulting from any of the following acts of the Licensed Agent or anyone acting on behalf of the Licensed Agent, subject to certain conditions and exclusions specified in the Closing Protection Coverage Form: 

1) Theft, misappropriation, fraud, or any other failure to properly disburse settlement, closing or escrow funds; and

2) Failure to comply with any applicable written closing instructions, when agreed to by the Licensed Agent. All parties to the transaction must complete the Notice of Availability and Offer of Closing Protection Coverage. The documents must be signed by the lender and returned to the title agent prior to the issuance of a Closing Protection Letter and prior to closing.  These documents are transaction specific, and will be sent to you when title work is started with NorthStar Title.
Sarah Minneman
NorthStar Title
Cell: 216.403.9833

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If you would like to buy or sell a home in the southern communities of Cleveland Ohio, please call me at 440-263-7496, or you may want to visit my website for more specific information on the communities I service: Brecksville Ohio Real Estate, Broadview Heights Ohio Real Estate, North Royalton Ohio Real Estate Independence Ohio Real Estate, Seven Hills Ohio Real Estate, Parma Ohio Real Estate, Parma Heights Ohio Real Estate and Middleburg Heights Ohio Real Estate.  Information is obtained from Neohrex (Northeast Ohio Real Estate Exchange) and is deemed reliable but not guaranteed and should be independently verified. Properties subject to prior sale, rental, or other status changes. All properties that are advertised as being listed or sold by Barb Szabo are in conjuntion with ReMax Trinity.

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6 comments • Barb Szabo E-pro Realtor Cleveland Ohio Homes • May 26 2010 08:04AM