Title Insurance: What It Is and Why You Need It

Homeowners insurance protects you against things that might happen: fire, storm, or theft. Title insurance protects you against things that already happened before you owned the property and were missed or could not be found in the public record.

A forged or improperly executed deed somewhere in the chain, an undisclosed heir with a claim, a prior owner's unpaid lien or judgment, a recording error at the county, a boundary or survey dispute, fraud or impersonation in a past transfer, and an easement nobody disclosed.

The lender's policy is almost always required by your mortgage lender and protects only the lender's interest, shrinking as you pay the loan down.

The owner's policy is optional in most states and protects your equity for as long as you or your heirs own the property.

A title claim does not just cost you the property; it costs you the legal defense too. The owner's policy typically covers the cost of defending your title as well as the loss itself.

It is a one-time premium paid at closing, not a recurring bill.

Anything listed as an exception on Schedule B-II of your commitment, defects you created or agreed to, and issues arising after you take title.

Most of the value is upstream: the search and the curative work that clears problems before you ever own them. The policy covers what that process could not find.