What Is Title Insurance—and Why You Should Care
Whether you're buying your first home, preparing to sell, or simply want to better understand your investment, one often-overlooked but essential piece of the real estate puzzle is title insurance. It’s not the most exciting part of the transaction—but it is one of the most important.
What Is Title Insurance?
Title insurance protects homeowners and lenders from potential legal issues or financial losses related to the ownership history of a property. These issues—called "title defects"—can include:
- Unpaid taxes
- Liens from contractors
- Clerical errors in public records
- Unknown heirs claiming ownership
- Forged or fraudulent documents
Title insurance ensures that if any of these problems arise after closing, you're protected from the financial fallout.
Two Types of Title Insurance
- Lender’s Title Insurance - Typically required by your mortgage lender, this policy protects the lender’s interest in the home until the loan is paid off.
- Owner’s Title Insurance - This is optional but highly recommended. It protects your equity in the home—often for as long as you or your heirs own the property.
Why Buyers Need It
Even with a clean title search, hidden issues can surface later. Title insurance provides peace of mind that you won’t be held financially responsible for something that happened before you owned the property.
Why Sellers Should Understand It
While sellers don’t typically pay for title insurance (unless it’s negotiated), providing a clean title is a legal responsibility. Ensuring all liens and ownership issues are cleared ahead of time helps avoid delays and builds buyer confidence.
A One-Time Cost, Lifetime Coverage
One of the best parts about owner’s title insurance? It’s a one-time payment at closing that protects you for as long as you own the home. That’s a small price for long-term security.
Final Thought: Peace of Mind You Can’t Afford to Skip
Buying or selling a home is a major milestone. Title insurance protects that milestone from legal headaches and financial loss. Whether you’re preparing to sell, in the process of buying, or just want to be informed—understanding title insurance is a smart move.
