All real estate is local—and when it comes to title insurance, choosing a local title company can make a big difference. While many buyers rely on their real estate agent or mortgage lender for a recommendation, it’s important to know: you have the right to shop around and choose your own title company.
Title insurance protects homebuyers and lenders from losses related to issues with the property’s title. These issues might include:
Undiscovered liens
Claims of ownership by others
Errors in public records
Forgery or fraud
Without this protection, you could risk losing your investment—or even the home itself.
Purchasing title insurance is a standard part of the homebuying process. It ensures that the seller has the legal right to transfer ownership, and it shields both you and your lender from any defects in the property’s title.
While claims are rare, the financial impact of not having coverage can be devastating. That’s why both a lender’s and an owner’s policy are often recommended.
Required by your mortgage lender
Covers the loan amount
Protects the lender until the mortgage is repaid
You pay the premium upfront
Optional, but highly recommended
Covers your equity in the home
Protects you for as long as you or your heirs have an interest in the property
Offered at a small additional cost when bundled with a lender’s policy
Note: A lender’s policy does not protect you—only the lender. To fully safeguard your investment, an owner’s policy is essential.
Standard title insurance covers past issues, but many problems can arise after you purchase your home, such as:
Unpaid subcontractor liens
Identity theft-related fraud
Zoning violations by previous owners
Encroachments by neighbors
For these situations, enhanced title insurance, like the ALTA Homeowner’s Policy, offers broader coverage for a small increase in cost.
When refinancing, your lender will require a new lender’s title policy—even if you’re staying with the same lender. This ensures protection against any title issues that may have arisen since the original purchase.
Many insurers offer discounted reissue rates, especially if you have a copy of your existing policy. Discounts and eligibility vary by state.
A lender’s policy ends when the loan is paid off.
An owner’s policy lasts as long as you (or your heirs) own the property or are financially tied to it.
Is It Fair for Low-Income Buyers?
Yes. While most of the cost is in title research and not in claims, premiums are scaled to the property’s price and mortgage amount, helping ensure affordability.
You might wonder, “How can I be sure my property is really mine?”
The answer is simple: Title Insurance
It’s an insured statement confirming your legal ownership, describing your property, and identifying any limitations—such as easements or existing liens. Most importantly, it guarantees your ownership and protects you from unexpected legal challenges.
