A one-time insurance premium paid at closing that protects the lender (and optionally the buyer) against losses from title defects discovered after closing.
Full Definition
Title insurance protects against losses from problems with a property's title that aren't discovered until after closing — forged documents, undisclosed heirs, errors in public records, undiscovered liens, or boundary disputes. There are two types: lender's title insurance (required by almost all lenders) and owner's title insurance (optional but strongly recommended for buyers). Both are purchased with a one-time premium at closing — no ongoing payments. Cost varies by state and property value, typically $500–$2,000+. Unlike other insurance policies that protect against future events, title insurance covers past events that affect current ownership. Once issued, it protects for as long as you (or your heirs) own the property.
Related Terms
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