Title Insurance

What is it and why do you need it?
Unlike other forms of insurance that focus on possible future events and charge an annual premium, the American Land Title Association (ALTA) explains that title insurance is purchased for a one- time payment and is a safeguard against loss arising from hazards and defects already existing in the title. Title insurance protects the bank against mistakes made in a title search. A title searcher checks on details such as making sure there isn't a lien against the title, or that the person you're buying the house from really owns it.

Title insurance assures you that your investment is secure. Typically title insurance is issued by a title insurance company and protects a property owner against the existence of title defects or claims against a property. Usually the seller is required to purchase a policy to protect the buyer; and if the buyer is obtaining a loan, the lender will require the buyer to obtain such a policy to protect the lender.

How much does it cost?
Title insurance is actually a package of two separate policies, one covering the buyer and the other covering the lender. Title insurance costs less than ½ of 1 percent of the property's purchase price. Although the premium is paid only once, at settlement, title insurance continuously protects the owners as long as they own the property. There are no annual renewal payments needed to keep the policy in force.

*Your lender should be able to provide additional guidance regarding title insurance.

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