What Is Title Insurance And Do You Need It
                     What Is Title Insurance, and Do You Need 
It? 
Buying a home is a lengthy process that includes shopping for the right home, taking a 
mortgage and obtaining other legal documents like title insurance. Title insurance protects you 
in case of any financial or legal problems with purchasing the home. Our article will discuss 
what title insurance is, types of title insurance, its costs, and where you should purchase it: 
What is Title Insurance? 
Title insurance is an insurance policy that protects a mortgage owner should there be third-
party claims on a property after a real estate closing. Before buying a mortgage, the mortgage 
company does a title search to show the property to reveal the property owner. A third party 
refers to someone with property ownership rights other than the property seller.  
Consider this; if a previous property owner did not pay a construction company for construction 
work, the company could claim property ownership. In such a case, title insurance will protect 
you from these claims. 
A title claim can happen anytime, even after owning the property for many years. A person, say 
an heir, could have ownership rights to property without their knowledge. Upon realizing 
property ownership, that person can claim the property you bought and maybe closed in on 
years ago. Therefore, there can be unforeseen claims that title insurance can help with. 
Types of Title Insurance 
There are two types of title insurance. The first is that owner's title insurance that protects the 
homebuyer any third-party claims. In this policy, the coverage is equivalent to the home 
purchase price. The amount remains constant as long as you keep property ownership the 
same, and you can only purchase owner's title insurance once. 
The second is the lender's title insurance protects the mortgage lender's interests. Upon 
property purchase, a mortgage lender gets the top claim on the property. Unlike owner's title 
insurance, you purchase lender's title insurance every time you take out a mortgage, and you 
may get a discount when refinancing a home less than ten years old. 
Title Insurance Cost 
An owner's title insurance policy depends on the property's purchase price. On the other hand, 
a lender's title insurance policy depends on the loan amount. According to ALTA, both policies 
cost about 0.5% to 1% of the property's purchase price. 
Title insurance cost is the same in some states, while you may have to shop around to get the 
best rates in other states. 
Who Covers Title Insurance Cost 
Local real estate determines whether the property buyer or seller pays for the owner's title 
insurance policy. A property buyer pays for the lender's title insurance as a part of the closing 
costs. A simultaneous issue charge reduces costs when an individual buys the owner's title 
insurance and the lender's policy. 
Where to Buy Title Insurance 
You may choose the title insurance company to use as a property owner. Alternatively, you can 
choose to get the insurance from your mortgage lender's suggestions, as you have similar 
financial interests in the property. 
Before engaging any title insurance company, conduct an online search of the ALTA registry to 
get a reputable title insurance company. 
Do You Need Title Insurance? 
The lender's title insurance policy is required before the property closes, while the owner's title 
insurance is optional. Although an owner's title insurance policy may add to the closing costs, it 
is a good caution should another party claim property ownership later after the property 
purchase.  
You may be buying a new property, but the land may have had other previous owners you do 
not know. It may seem like an unnecessary additional cost; however, it is a small cost to protect 
your property title after property closing.Get in touch with us today for your title insurance 
services for both residential and commercial properties.