Home Home insurance Home Insurance Basics Title insurance: What is it and do you need it? Title insurance: What is it and do you need it? Title insurance protects the homebuyer and lender from financial trouble if there is a dispute or issue with the title of your home, such as a lien or a will. View Carriers Please enter valid zip Compare top carriers in your area Written by Shivani Gite Shivani Gite Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions. | Reviewed by Nupur Gambhir Nupur Gambhir Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service. | Updated on: June 21, 2024 Why you can trust Insure.com Quality Verified At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry. Title insurance protects home buyers and lenders in the event that there is a dispute or other issue with the title of a home. It’s generally required as part of the home buying process. Common issues with titles include liens and unpaid back taxes. A clean title is a requirement for any real estate transaction, and issues with the title can be costly. Title insurance protects against those costs. Title insurance can further protect you as the owner for as long as you own the property. Below we’ll cover what title insurance is, how it works and whether you need it. Key Takeaways Title insurance pays for financial damage resulting from problems with the title of a home during a real estate transaction. Title insurance is a common part of the process of buying a home, and the lender will likely require it. You can choose the title insurance company, although your lender will likely have a suggestion. What is title insurance and why do you need it? Title insurance is a type of insurance policy that protects home buyers and lenders from financial loss if there is a dispute about the title of a property. Your lender might recommend a title insurance company, but you should do some research of your own. After all, title insurance can cost between $500 and $3,500, depending on your state, the cost of your home and what insurance provider you pick. Comparison shopping can shave down that price. There are also different types of title insurance, and you’ll want to make sure that you’re fully covered and not just the lender. Title insurance is a common part of the home buying process, and is often rolled into the closing costs. What does title insurance cover? Title insurance covers any underlying issues with the home or property that the title company may have missed during the home-buying process, explains John W. Mallett, President, MainStreet Mortgage. Here’s what title insurance typically covers: Ownership disputes: Title insurance can protect against claims disputing ownership rights, such as undisclosed heirs, forged documents, or errors in public records. Liens: It covers unknown liens on the property, including unpaid taxes, mortgages, or other debts that may affect the ownership. Fraud and forgery: Title insurance can provide coverage if someone fraudulently represents themselves as the property owner. Survey and boundary issues: It covers survey discrepancies, boundary disputes, or illegal structures encroaching on the property. Invalid Deeds and Documents: If there are issues with the validity of deeds, contracts, or other legal documents related to the property, title insurance can provide coverage. Title insurance is valuable when the title company’s public record search fails to find any hidden issues like liens or ownership disputes. Types of title insurance There are a few different types of title insurance. Below is a quick rundown. Basic lender’s title insurance policy This is the title insurance your lender gets. Lender’s title insurance will most likely be a required as a part of the mortgage. If there’s something like a mechanic lien or unrecorded easements and access rights, your lender will be protected. However, you will not be. Typically, your lender has a title company they use and will secure the lender’s title insurance policy themselves. However, since you’re the one footing the bill, you can shop around if you’d prefer a different insurer. Basic owner’s title insurance policy Owner’s title insurance protects you, the homeowner. If an issue arises that wasn’t covered during a title search, and you suddenly need to hire an attorney to defend your home, owner’s title insurance will help you pay for that. This type of title insurance is not a standard part of most mortgages. The lender will require coverage that protects them, but they will leave it up to you whether or not you get title insurance that protects you. Extended owner’s title insurance policy This is also called an enhanced owner’s title insurance policy. Per Mallett, the odds of something going wrong are really slim, but it can happen, especially the older your house is and the more property you have. Maybe a previous owner made some home improvements that break some zoning code, or, as noted, you could learn a favorite part of your property isn’t yours. You get some unpaid tax bills on your property – it should have been paid long before you moved in by the previous owner, but you’re being told to pay up. Extended owner’s title insurance would pay for that. Some of the random issues that could crop up that extended owner’s title insurance covers include: Building-permit violations Subdivision maps Covenant violations Living trusts Structure damage from mineral extractions Encroachments and forgeries after title insurance is issued So if something goes wrong with your title, and it leads to you needing to go to court or spending a small fortune to make the problem go away, title insurance can be a lifesaver. 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Types of homeowners insurance What does homeowners insurance cover? Insurance coverage for holiday catastrophes you’ve seen in the movies 11 astonishing things covered by home insurance How much should I insure contents for a 2,400-square-foot home appraised at $600,000? Hidden home insurance loopholes can shock you See more > How much does title insurance cost? According to the National Association of Realtors, the average cost of title insurance is around $1,000. However, the amount depends on the state — each state regulates title insurance differently — and it depends on the price of your home. You may pay much less – or considerably more. According to the American Land Title Association, you can expect to pay around half a percent of the purchase price of the property for title insurance. What insurance companies offer title insurance? There are many title companies. Some of the biggest names are: Fidelity National Title Insurance Company Chicago Title Insurance Company First American Title Insurance Company Old Republic National Title Insurance Company Attorney’s Title Insurance Funds, Inc. If you’re stuck on who to turn to, Mallett suggests talking to your real estate professional or bank and asking for a recommendation. When you pay for title insurance, though, you aren’t just paying money to insure you down the road. You are getting something out of it now. Before you buy title insurance, a title company is working to make sure there are no issues with your title. “If you get a good title company, they will fix those issues for you,” Mallett says. Once the title company determines everything is fine, they insure your home with title insurance. In the unlikely event that the title company didn’t actually catch everything, and then something goes wrong, then your title insurance will protect you. How to buy title insurance Buying title insurance is a pretty straightforward process. Ask your real estate agent, lender or friends for recommendations for a title insurance company and research the insurer. Compare quotes from several insurers. You could try the American Land Title Association website, which has a search engine of title insurance companies. If you want to go the extra mile, the Consumer Financial Protection Bureau suggests asking for references from recent customers. Once you’ve made a decision, based on the lender’s reputation and price, choose your title company and contact your lender. How to save money on title insurance Your best bet is to comparison shop. You’ll also want to consider if the title company has a good reputation. Once you feel you have found the title company for you, you won’t be able to negotiate much, if at all, especially if your state has strict rules about title insurers, but sometimes, you can negotiate some of the extra fees that may be tacked onto the bill. Even in this digital world, there may be some copying charges, for instance, that you can knock off the price. You also can ask your title company if they can give you the “simultaneous issue rate.” A simultaneous issue rate may be granted if your lender requires a lender’s title insurance policy — which you will have to pay for — and you are buying a basic or extended owner’s title insurance policy — which protects you— and you pay for them both at once. Title concerns for new home construction Even if you’re buying a totally new home, you should get title insurance. Even though the house may be new, the property is not. Somebody – probably many somebodies – owned your land before your house. As unlikely as it seems, problems can still crop up where the question of who owns your land comes up. “The most important asset you have is probably going to be your home, and not to have title insurance protecting that is just a big mistake,” Mallet says. “That’s why lenders won’t do a loan without it.” Frequently asked questions How long does title insurance coverage last? Owner’s title insurance lasts for as long as you own the property unless you choose to terminate the policy sooner. A lender policy lasts only for as long as the loan remains unpaid. For example, if you take a 30-year mortgage on the property and keep it until the end of the term, the lender policy will expire at that time. Is title insurance coverage worth it? Title insurance policies serve as a protective shield against potential future property ownership disputes, safeguarding you from costly lawsuits. Can you buy title insurance after closing? You are generally required to purchase lender’s title insurance at the time of the mortgage agreement but you can buy an owner’s title insurance policy at any time after the closing of the property purchase. Shivani GiteContributing Writer | . .Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions. In case you missed it What is HO-6 condo insurance and how much does it cost? Average homeowners insurance cost by ZIP code in 2024 What is dwelling coverage and how much do you need? Personal liability insurance: What it is and why you need it Renters insurance quotes: Compare rates Hurricanes and home insurance: How hurricane insurance works How replacement cost coverage works when you file a claim How much do claims increase home insurance rates? 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By Lena Borrelli Condo insurance calculator: Estimate the cost of coverage By Jessica Olson Average homeowners insurance cost by ZIP code in 2024 By Barry Eitel How to find a homeowners insurance policy By Shivani Gite On this page What is title insurance and why do you need it?What does title insurance cover?Types of title insuranceHow much does title insurance cost?What insurance companies offer title insurance?How to buy title insuranceHow to save money on title insuranceTitle concerns for new home constructionFrequently asked questions ZIP Code Please enter valid ZIP See rates