Title Insurance

Title insurance is a form of insurance that protects both buyers and lenders from surprises at the time of purchasing a property or afterward. This can include any pre-existing liens or unpaid dues such as property taxes, homeowners association fees, and conflicting wills.

Most forms of insurance protect its buyer from future events such as natural disasters. Title insurance, in contrast, protects a property buyer and lender from past events. This guarantees that the new buyer will not be subject to 3-rd party claims that might not initially show in a title search.

There are a wide array of possible issues a property may have that title insurance covers for homebuyers. This can include:

• Boundary disputes
• In cases of a recent divorce – claims by an ex-spouse who didn’t approve the sale
• Unpaid child support by the former owner
• Errors in a property survey
• Errors on the property deed
• Building code violations by a former owner
• Conflicting wills
• Claims related to a forged power of attorney
• Liens from contractors, taxing entities, and/or previous lenders
• Encroachments
• Improperly recorded documents

Title insurance is typically paid for by the seller of a property and is included in a deal’s closing costs. It tends to be a one-time fee unlike many other forms of insurance. Its price is relative to the property and generally costs 0.5% – 1% of a property’s appraised value. Title insurance providers are generally recommended via a loan provider or realtor.

It is highly recommended and often required to be covered by title insurance when buying a property.