What is Home Title Insurance?
- Title insurance protects you and your mortgage lender from conflicting claims to the property.
- It costs about 1% of the property sale price— but it's a one-time payment that lasts the life of your property ownership.
Whether you're buying a new home or staying put, stay protected with homeowners insurance. Compare quotes with The Zebra to find the right coverage at the best value.
What is title insurance?
Title insurance is a form of indemnity insurance that protects you (the homebuyer) and your lender from financial loss if someone challenges your ownership rights.
When you buy a home, you're handed a title—the document that proves you own it. Before issuing a policy, the title insurance provider conducts a title search, reviewing decades of public records to find and fix potential problems like unpaid taxes, liens, or property disputes. But even the most careful search can miss hidden issues, which is why title insurance protects you if an issue arises at a later date.
🔎 Why This Matters: Title insurance can’t prevent someone from making a claim against your home, but it protects your investment by covering legal costs and financial losses if a hidden problem arises.
Title insurance at a glance
- Provides peace of mind by confirming legitimacy of property ownership.
- Protects against unforeseen claims, liens, or disputes that may arise after the purchase.
- Costs a one-time, up-front charge that makes the title insurance policy last the life of your ownership.
"Unlike other forms of insurance, which cover you for future losses, title insurance extends back in time for an indefinite period. It protects the homeowner against loss scenarios prior to the effective date of the title insurance policy, which is typically the closing date of your home purchase."
-Mark Friedlander, Senior Director of media relations at the Insurance Information Institute
How much does title insurance cost?
Title insurance prices range depending on state regulations and property value, but you can expect costs to fall somewhere between 0.5% and 1% of the property's purchase price.[1]
The up-front price can also include a variety of other fees: policy endorsement, settlement service, document preparation and notary fees, to name a few.
Let's say you purchased your home for $350,000— if title insurance cost 0.75% of the purchase price, you can expect to pay $2,625 for title insurance.
The equation above offers a solid benchmark for calculating title insurance costs. But like any insurance product, rating factors come into play. In the case of title insurance, the state you live in is the most important. The table below displays information on state-specific title insurance rules.
| States | Rates standarized? | Can service fees vary by company? | Notes |
|---|---|---|---|
| Florida, Texas, New Mexico | ✔️ Yes | 🚫 No | All companies charge the same for both the policy and services. |
| New York, New Jersey, Pennsylvania, Delaware, Ohio | ✔️ Yes | ✔️ Yes | Policy cost is fixed, but fees for services like title search may vary. |
| Most other states | 🚫 No | ✔️ Yes | Policy and service fees vary depending on provider and local practices. |
Types of title insurance
There are two types of title insurance: lender's policy and owner's policy. These policies protect the lender and the owner if a third party claims to have partial ownership even after you purchased the property. Title insurance is included as part of your closing costs when purchasing a home— so both types are paid upfront, but each come with distinct characteristics. Let's dive in.
Lender's title insurance
- Required by lenders for most mortgages
- Protects the lender, not the buyer, against future title disputes
- Cost is based on your loan amount, not the purchase price of the home
- Typically paid as a one-time premium at closing
- You can choose the title insurance provider, even if the lender recommends one
- Active until the loan is paid off
Owner's title insurance
- Protects the buyer from future title-related liabilities
- Optional, but highly recommended for peace of mind
- Cost is based on the home’s purchase price
- Covers legal costs and losses from ownership disputes or claims
- Typically purchased at closing, alongside the lender’s policy
- Good for as long as you own the property
Lender Requirements for Homeowners Insurance | The Zebra
When you close on a home, your mortgage lender will require you to carry sufficient home insurance to protect it. Find out what coverages you need by consulting our guide.
How to shop for title insurance
You know what title insurance is now, but how do you get it? The best place to start is with your realtor, mortgage lender or a real estate attorney— they'll have recommendations for title insurance providers, but you are not required to pick one of their suggestions; the Real Estate Settlement Procedures Act (RESPA) made sure of that.[2]
Our best advice? Use your real estate agent's recommendation as a starting point, and compare companies against it. This way, you have some autonomy in choosing and can see which company is right for you.
According to the American Title Land Association (ATLA), the top five providers of title insurance in the U.S. based on market share are[3]:
- First American Title Insurance Co.
- Old Republic National Title Insurance Co.
- Fidelity National Title Insurance Co.
- Chicago Title Insurance Co.
- Stewart Title Guaranty Co.
Finding title insurance: a step-by-step guide
- Inquire about recommendations with your lender or realtor— they'll know of a company or two that offers title insurance.
- Use their suggestions as a jumping off point and compare with other providers.
- Browse coverage plans. Some lenders (like your own bank or credit partner) may offer benefits.
- Once you've narrowed down your selections, get in touch with a title insurance agent to discuss the right plan for your needs. Note: title insurance is a specialized type of insurance that is not sold by property and casualty insurers or agents.
Do I need title insurance?
If you have a mortgage, title insurance is typically mandatory— it's only optional for a cash buyer without a mortgage.
If you do have the choice, you may be weighing your options. We understand if adding yet another charge to the already high price tag of a home seems daunting, but the risks associated with not having title insurance happen more often than you think. The bottom line is that, without title insurance, you open yourself up to the possibility that another party can threaten your legal right to the property. Here's a handy guide for determining the benefits and risks of title insurance:
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Confirms your legal ownership is secure and protected from past issues tied to the property.
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Covers legal fees and potential losses if someone challenges your ownership.
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One-time cost, long-term coverage
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Catches problems before closing – A thorough title search can reveal issues like liens, errors, or conflicting claims before they become your problem.
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A clean, insured title makes selling your home smoother and less risky for future buyers.
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Previous owners may have unpaid debts (like property taxes or contractor bills) that become your responsibility.
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Mistakes in public records, like incorrect legal descriptions or misspelled names, can cause ownership disputes.
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A long-lost heir or prior owner could come forward with a legal claim to the property.
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Conflicting surveys or unclear property lines might result in legal battles with neighbors.
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Without title insurance, you’d be responsible for paying legal fees to defend your ownership in court.
Keeping title insurance safe
Once you've purchased title insurance, it's essential to ensure its security, particularly against theft. Home title theft is a sneaky kind of fraud where someone illegally transfers your property ownership—often using forged documents—without you ever knowing. While title insurance is great for protecting against issues that happened before you bought your home, it won’t help much if someone commits fraud after you're already the rightful owner.
To safeguard your property, use strong online security practices, regularly monitor your property records, and consider enrolling in a title monitoring service. Taking these proactive steps can help you catch suspicious activity early and avoid costly legal issues.
Just closed on your home? See how much you could save on homeowners insurance— compare quotes today.
Frequently asked questions: Title insurance
Barriers to entry: Closing costs fot first-time and low-income homebuyers. Fannie Mae
Real Estate Settlement Procedures Act. Federal Reserve
ALTA Reports Q1 2024 Title Premium Volume. ALTA