Costs & insurance

Title insurance

A one-time policy paid at closing that protects against defects in a property's title — liens, forged deeds, unknown heirs — that could surface after you buy.

Sources

What does title insurance mean?

Title insurance guards against problems in a property's ownership history that could threaten your claim to it later. A lender's policy is required and protects the lender's interest; an owner's policy is optional but protects your equity. Unlike other insurance it is a single premium paid once at closing, not a recurring bill, and in some states the seller customarily covers the owner's policy.

Lender’s policy vs. owner’s policy

Lender’s policy vs. owner’s policy
	Lender’s policy	Owner’s policy
Required?	Yes, with a mortgage	Optional
Protects	The lender, up to the loan balance	You, up to the purchase price
Lasts	Until the loan is paid off	As long as you or your heirs own the home
Paid	Once, at closing	Once, at closing

Who pays for each policy is set by local custom — in many areas the seller buys the owner’s policy. Buying both at once usually earns a simultaneous-issue discount.

What it actually protects against

Title insurance covers problems that existed before you bought the home but surfaced later: a forged deed, an unknown heir, an unreleased lien, a recording error, or a boundary dispute missed by the search. Unlike other insurance, you pay a single premium at closing. Rates are regulated in some states and vary widely, so ask your title company for the figure early.

Frequently asked

Do I need both a lender’s and an owner’s title policy?

The lender’s policy is required and protects only the lender. The owner’s policy is optional but protects your own equity against title defects — and because it is a one-time premium, most buyers treat it as cheap insurance on a large purchase.

How much does title insurance cost?

It varies by state and price but typically runs a few hundred to a couple thousand dollars, paid once at closing. In some states the seller customarily pays the owner’s policy, so it is worth confirming who covers what.