What Buyers Should Know About Title Insurance

When purchasing a home, most buyers focus on the property itself—location, price, condition, and financing. But there’s another key step that protects your ownership: title insurance. It’s one of the least understood aspects of real estate, yet it plays a vital role in ensuring your investment is secure.

1. What Is Title Insurance?

Title insurance is a policy that protects you (the buyer) and your lender against potential legal issues with the property’s ownership. Unlike other types of insurance that protect against future events, title insurance covers problems from the past—such as undisclosed liens, ownership disputes, or errors in public records.

2. Why It Matters for Buyers

Imagine buying your dream home, only to find out later that someone else has a legal claim to it. Title insurance protects you from:

• Outstanding debts or liens tied to the property.

• Errors in past paperwork or records.

• Undisclosed heirs or claims of ownership.

• Fraud or forgery involving past transactions.

Without it, you could face costly legal battles—or even lose your home.

3. Who Pays for It?

In many cases, the seller covers the cost of the buyer’s title insurance policy, but this can vary depending on the local market and negotiation. Buyers usually pay for the lender’s policy, which protects the mortgage company’s financial interest.

4. Types of Title Insurance

There are typically two policies involved:

• Owner’s Policy – Protects the buyer’s ownership rights.

• Lender’s Policy – Protects the mortgage lender until the loan is repaid.

For complete protection, buyers should have both.

5. Is It a One-Time Cost?

Yes. Unlike most insurance premiums, title insurance is a one-time payment made at closing. Once purchased, it covers you as long as you own the home.

Final Thoughts

Title insurance may not be the most exciting part of buying a home, but it’s one of the most important. It ensures that when you close on your property, you’re the rightful owner—free of hidden legal surprises. Before signing at the closing table, make sure you understand what your policy covers and why it matters.