What Every Buyer Should Know About Title Insurance

When purchasing a home, there are many costs and documents to consider — and one that often confuses buyers is title insurance. While it may seem like just another fee at closing, title insurance plays a critical role in protecting your investment. Here’s what you need to know.

1. What Is Title Insurance?

Title insurance is a policy that protects you and your lender against financial loss if a problem arises with the property’s title. A “title” is the legal ownership of the property, and issues with it can put your rights as the new owner at risk.

2. Why Is It Important?

Even if a title search is completed before closing, hidden issues can surface later. Title insurance ensures you won’t be financially responsible for problems that existed before you bought the home.

3. Common Issues Title Insurance Covers

• Unpaid property taxes

• Liens from contractors or lenders

• Errors or omissions in deeds

• Fraud or forgery in past ownership documents

• Unknown heirs claiming rights to the property

Without coverage, you could be forced into costly legal battles or even risk losing your home.

4. Types of Title Insurance

• Lender’s Policy: Required by most mortgage lenders, this protects the lender’s financial interest.

• Owner’s Policy: Optional but highly recommended, this protects your personal ownership rights and equity in the property.

5. How Much Does It Cost?

Title insurance is typically a one-time premium paid at closing. The cost depends on the property’s value and local regulations but is generally a small percentage of the purchase price.

6. Do You Really Need It?

While you may not legally be required to purchase an owner’s policy, skipping it could put your biggest investment at risk. Think of it as peace of mind that your ownership is secure.

✅ Takeaway: Title insurance may not be the most exciting part of buying a home, but it’s one of the most important safeguards you can have. It protects your ownership rights, ensures you won’t be blindsided by past issues, and gives you confidence in your purchase.