Buy. Sell. Mortgage. Law

What is Title Insurance?

When you purchase a property, you become the owner of the land, the building, and any improvements that come with it. What if someone else has a claim on the property that you didn’t know about, like a lien for unpaid taxes or a boundary dispute? This is where title insurance comes in. In this post, we’ll explain what title insurance is, how it works, and why it’s important for anyone buying or refinancing a property to have this type of coverage. 

All About Title InsuranceKCP Legal Services Person Holding Title Insurance Contract Title Insurance Blog

Title insurance is a type of insurance that protects the buyer or lender from financial loss due to defects in the title of the property. These defects can range from an incorrect legal description to an unpaid mortgage or even a fraudulent sale. When you purchase title insurance, the insurer will perform a comprehensive search of public records to determine if the title is clear. If any problems are found, the insurer will either fix them or compensate the policyholder for any financial losses incurred.

It’s important to note that title insurance is different from other types of insurance, like homeowner’s insurance, which protects against physical damage to the property. Title insurance, on the other hand, protects against financial loss due to defects in the title. This is why it’s often required by lenders when you obtain a mortgage. 

Types of Title InsuranceKCP Legal Services Piggy Bank on Sheet With Words Title Insurance Blog

There are two types of title insurance: owner’s and lender’s. An owner’s policy protects the homeowner from any title defects that arise after the purchase. A lender’s policy protects the lender’s investment in the property. As a homebuyer, it’s usually a good idea to purchase both types of policies to have maximum protection. 

The cost of title insurance varies by location and is based on the purchase price of the property. In general, it’s a one-time fee paid at closing. The cost can range from a few hundred dollars to several thousand dollars, depending on the value of the property and the complexity of the title search. While it may seem like an unnecessary expense, title insurance can save homeowners thousands of dollars in the long run if any unforeseen title defects arise.


Title insurance is a necessary and important protection for anyone buying or refinancing a property. It provides peace of mind to homeowners and lenders alike, ensuring that any financial losses due to title defects will be covered. When you purchase a property, make sure to ask your real estate lawyer or lender about title insurance options and weigh the benefits against the cost. It’s a small expense that could potentially save yo u thousands of dollars in the long run.

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