Title Insurance is a one-time purchase that protects homeowners and lenders from financial loss due to title defects, ownership disputes, and other unforeseen issues. Unlike other types of insurance that require ongoing payments, title insurance is paid once at closing and lasts as long as you own the property.

What Determines the Cost of Title Insurance?

The price of title insurance varies based on several factors, including:

• Property Value – The premium is typically based on the home’s purchase price or loan amount.

• State-Regulated Rates – Title insurance costs are often standardized within each state.

• Title Search & Underwriting – A portion of the cost covers the research required to verify the property’s ownership history and resolve potential title defects.

• Risk Assessment – Properties with complex ownership histories may require additional underwriting, impacting the cost.

What Does Title Insurance Cover?

An owner’s title insurance policy provides protection against:

• Fraud, forgery, or ownership disputes

• Unpaid liens, debts, or past-due property taxes

• Errors in public records or legal descriptions

• Boundary or easement conflicts

A Lender’s Policy is required by mortgage lenders and only protects the bank’s interest in the property. A separate Owner’s Title Policy is recommended to protect the homeowner.

Who Pays for Title Insurance?

The responsibility for paying title insurance varies by location and may be negotiated in the purchase contract. Typically:

• The buyer pays for the Lender’s Title Policy.

• The Owner’s Title Policy cost is negotiable between the buyer and seller.

Key Takeaway

Title Insurance is a small, one-time investment that provides long-term protection against title issues that could threaten homeownership. Understanding what it covers and how it’s priced ensures a smarter, more secure real estate transaction.