What Is Title Insurance?

Title insurance protects you if problems with a home’s ownership history show up after you close.

Before closing, a title company researches public records to confirm:

• The seller owns the home

• There are no unpaid liens or claims

But even the best research can miss things. Title insurance is your backup plan.

What Can It Protect You From?

Title insurance may cover:

• Old unpaid tax or contractor liens

• Errors in public records

• Forged signatures from a prior sale

• Unknown heirs claiming ownership

• Boundary or survey disputes

These issues can appear months—or years—later.

Two Types of Title Insurance

Lender’s Policy

• Required by most lenders

• Protects the lender, not you

Owner’s Policy

• Protects you, the buyer

• Usually optional

• Lasts as long as you own the home

• Paid one time at closing

Is Owner’s Title Insurance Required?

In many states (but not all), owner’s title insurance is optional.

However, in many markets, the seller typically pays for it as part of local custom. If it’s not standard in your area, it can often be negotiated into the contract—which makes it worth asking for.

How Much Does It Cost?

According to First American Title, the cost depends on the state, purchase price, and policy type.

Research from Federal National Mortgage Association (Fannie Mae) shows the average cost of title insurance is about 0.42% of the home’s purchase price.

Example:
$300,000 home → about $1,260, paid once, with lifetime coverage.

Is It Worth It for First-Time Buyers?

For most first-time buyers, and buyers in general, yes.

You’re protecting your largest investment from hidden past issues—often with a cost that’s paid by the seller or negotiable in the deal. If a problem arises later, title insurance can cover legal costs and protect your ownership rights.

Bottom Line

• Owner’s title insurance is often optional, but valuable

• In many states, the seller usually pays for it

• If not standard, it can often be negotiated

• It’s a one-time cost that protects you long-term

For most first-time buyers, and buyers in general, this is one of those protections you’ll hopefully never need—but will be very glad you have if you do.

A Thought on Wisdom & Protection

“The prudent see danger and take refuge, but the simple keep going and pay the penalty.”
— Proverbs 22:3

Buying a home is one of the biggest decisions most people will ever make. Wisdom isn’t about expecting problems—it’s about being prepared if they arise.