Title Insurance on a Home

Man carrying a title insurance policyHome purchasing is one of the most significant investments you’ll ever make. It’s an exciting process, but it can also be stressful. After all, you’re spending a great deal of money and banking on the fact that you’re getting what you paid for. That’s why title insurance is so important.

Title insurance, in a nutshell, protects you in case there are any problems with the title of your property. In this article, we’ll break down all you need to know about title insurance, from what it is and what it covers to how much it costs and why you need it. You’ll also learn how to save money on your title insurance to get the best deal.

Benefits of Title Insurance

Title insurance protects the lender and the buyer against unknown risks of the title. It may cover anything from past property owners to miss-filed documents that create a “cloud” of potential litigation. Two types of title insurance are typically offered: an Owner’s and a Lender’s policies. It is wise for people buying a home to purchase both approaches as they need title insurance to protect themselves. An Owner’s policy is typically valid until the property is sold, while a Lender’s policy is usually valid only until the loan is paid off. Both types of title insurance will protect the owner and the lender if any legal issues related to the property's title.

What is Title Insurance?

Title insurance protects the lender and the buyer from any potential issues arising from the sales or transfer of a property. It is essential to buy title insurance to ensure that the property is free and clear to purchase and that the buyer has a legal right to use and occupy the property. 

There are two types of title insurance; the lender’s policy, which protects the lender, and the owner’s policy, which offers protection to the buyer. Both policies cover any losses or damages caused by title defects, liens, or encumbrances, including any found to exist before or after the purchase. 

It is essential to understand that title insurance is only needed when a home is purchased or refinanced. In other words, if you are not buying or refinancing a property, there is no need to purchase title insurance.

Types of Title Insurance

Regarding title insurance, two types can be purchased: lender's title insurance and owner's title insurance. Lender's title insurance is typically required by the lender and protects them in the case of any issues with the title. On the other hand, owner's title insurance is optional and is intended to protect the buyer from any problems with the title. This insurance typically covers any financial losses if there is a dispute over property ownership. 

To buy title insurance, you must go through a title company or an attorney to assess potential risks and issue the insurance. Title insurance can typically be purchased once and is valid for the policy's life. 

It is essential to understand that title insurance does not cover any damage to the physical property. If you need title insurance to cover a home purchase, you should speak with a title representative to learn more about the coverage and what will be included in the policy.

Cost of Title Insurance 

The cost of title insurance is typically a one-time fee paid at closing. The buyer or their lender usually covers the cost when purchasing a home. The cost of title insurance varies depending on the type of title insurance policy purchased and the price of the house. Buyers typically need to buy two types of title insurance policies: a lender's policy and an owner's policy. 

A lender's policy covers the loan amount and is purchased on behalf of the lender. An owner's policy protects the buyer for the total amount of their purchase. Title insurance policies typically cover items such as unpaid liens and title defects due to forgery, errors in the public record, and missing heirs. 

For both policies, the insurance cost is based on a percentage of the home's purchase price and is paid at closing. Title insurance is an integral part of the closing process, and most lenders and buyers need to purchase title insurance.

Can You Reduce the Price of Title Insurance?

If you're buying a home, you'll need title insurance to protect you from unexpected risks associated with the property title. Title insurance is provided by an insurance company and is generally required by the lender when you buy a home. 

The cost of title insurance usually depends on the type of title insurance you buy, the value of the property, and the state. To get the best rate for title insurance, you should shop for the best coverage for your specific needs. When comparing quotes, keep in mind the range you will get, the time frame of the content, and any optional services that may be covered. 

It's essential to understand what title insurance does and does not cover, so it's best to consult a professional to understand the policy details. Title insurance typically covers title defects, fraud, forgery, and liens or encumbrances you weren’t aware of when you bought the property. You may also be able to save money on title insurance if the title was recently transferred to you. 

When purchasing a home, it's essential to understand the cost and need for title insurance. With comparison shopping and research, you can save money and find the best deal for your needs.

Why You Need Title Insurance

When purchasing a home, title insurance is an important consideration. This type of insurance protects the buyer of the house, and the lender, against losses that may occur due to unknown title issues. Title insurance may be required by the lender, depending on the type of loan they provide. Although the cost is usually included in the closing costs, buyers may buy title insurance.

Determining what type of title insurance is necessary for the particular situation is essential. Title insurance is designed to cover losses due to undiscovered title problems related to the ownership of a specific property. Title insurance covers any costs or legal fees associated with defending the title. Whether or not you need title insurance depends on the particular situation. Generally speaking, it is strongly recommended to purchase title insurance for most real estate purchases.


For homebuyers and homeowners, purchasing title insurance is a crucial step. Not only does it provide financial protection and peace of mind, but it also can save you money in the end. While the cost of title insurance can be expensive, it is an investment that can save you from unnecessary expenses. When purchasing a home, research and consider the benefits of title insurance. If you decide that title insurance is right, shop for the best coverage and cost. Title insurance may be an added expense, but having the right coverage can save you and your family money, stress, and potential legal problems.