04/02/2026
Title Insurance: Why It Matters and What It Protects
In the excitement that comes with buying a new home, there's one important process that shouldn't be overlooked: title insurance. It might sound boring, but title insurance plays a big role in protecting you from ownership disputes and hidden legal issues, so it's well worth filling out the extra paperwork.
Of course, the first step is understanding what title insurance actually covers. There are two types of title insurance you need to be aware of. Lender's title insurance protects the mortgage company's investment, so it's no surprise that most lenders require it. Owner's title insurance protects you by covering your financial interest in the property (often for the entire time you own the property).
If you're wondering whether you really need title insurance, the answer is most likely yes. Even if you've conducted a thorough title search, there are still some issues that can slip through the cracks, including:
Unpaid property taxes
Contractor liens
Public record clerical errors
Forged documents
Fraudulent transfers
Boundary disputes
Undocumented easements
Lost heirs claiming ownership
Title insurance helps cover unexpected legal fees and potential losses if a valid claim appears after closing. The good news is that it's usually all wrapped up in a one-time premium paid at closing. However, the actual cost will depend on several factors, such as the purchase price, location, and coverage details. Typically, this falls somewhere between 0.5% and 1% of the property's value.
Even better news: You might be able to negotiate to get the seller to pay a portion of the title insurance costs. While the buyer typically covers the lender's title insurance policy, it's not uncommon for the seller to split the cost of the owner's policy so they can deliver a clear title. Your real estate agent may be able to provide general guidance, but for in-depth questions, it's often best to reach out to your title company directly. They'll point you in the right direction and ensure you have the coverage you need.
