Title Insurance, Explained
Every home has a history of ownership — a chain of deeds, liens and transfers stretching back decades. Title insurance protects against a defect hidden in that history surfacing after you buy: a forged signature, an unpaid lien, a missing heir, a boundary error.
Two policies
- The lender’s policy is required. It protects the lender’s interest for the loan amount.
- The owner’s policy is optional but widely recommended. It protects your equity and ownership, for as long as you or your heirs own the home — a one-time cost for lasting protection.
Why it is worth it
Most title problems never surface — but when one does, it can threaten your entire ownership, and defending it without insurance is expensive. For a single premium paid once at closing, an owner’s policy removes that risk permanently. It is quiet insurance you hope never to use.
A title search happens before closing to catch problems in advance; title insurance covers what a search could not find. Together they are why American home ownership is so secure — do not skip the owner’s policy to save a little at closing.