Title insurance protects against defects in a property's ownership history, such as liens, forged documents or errors in public records. You pay once at closing.
Two policies
- Lender's policy protects the mortgage lender and is usually required.
- Owner's policy protects you and is optional but often recommended.
What a title search finds
- Unpaid taxes and liens.
- Judgments against previous owners.
- Easements and restrictions.
- Gaps or errors in the chain of ownership.
What it covers
A policy generally covers covered title defects that existed before you bought, including legal defense costs. It does not cover problems you knew about, matters excluded in the policy or physical defects such as a leaky roof.
Tips
- Review the title commitment before closing.
- Ask about exceptions and how to resolve them.
- Compare title companies, since rates are regulated in some states and negotiable in others.
- Ask whether you qualify for a reissue rate.
- Keep the policy with your closing papers.
Frequently asked questions
Is title insurance recurring?
No. It is a one-time premium.
Do cash buyers need it?
Not required, but it can still protect you.