Title Insurance
A policy that protects buyers and lenders against claims arising from defects in the property's chain of ownership.
Title insurance covers risks that a title search might miss, forged deeds in the chain of ownership, undisclosed heirs, mechanic's liens that didn't surface in the search, fraud, recording errors. Unlike most insurance, the premium is paid once at closing and the coverage lasts as long as you (or your heirs) own the property.
There are typically two policies issued at closing: a lender's policy protecting the bank's interest in the property up to the loan amount, and an owner's policy protecting the buyer's equity up to the purchase price. The lender's policy is usually required; the owner's policy is optional but inexpensive relative to what it covers.
Title insurance prices vary by state and provider. In some states the rates are heavily regulated and identical across companies; in others, shopping can yield meaningful savings on identical coverage.
Related terms
Other terms you'll see alongside Title Insurance
A legal claim against property that secures a debt and must be paid off before clear title can transfer.
The fees paid to the title company or attorney handling the closing, including title services and recording.
The collection of fees and prepaid items, separate from the down payment, that a borrower pays at closing.
The final step of a real estate purchase or refinance where loan documents are signed and ownership or lien position transfers.
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