What is title insurance
Title insurance protects against problems with a property's ownership record, such as an old unpaid lien, a forged signature in a past sale, or an heir no one knew about. A lender's policy protects the lender and is usually required; an owner's policy protects you and is usually optional. Both are generally paid once at closing, and a title search happens first.
Why it matters: It covers the problems in a home's ownership history that nobody can see from the street.
Steps
- Ask your closing company when the title search will be done and read its results.
- Look for any liens, easements or claims listed as exceptions.
- Ask what the lender's policy covers and whether an owner's policy is offered.
- Compare the owner's policy cost with what it would protect, and decide.
- Keep the final policy with your closing documents.
Stop and call a professional if
- the title search shows a lien, a boundary dispute or a claim: ask your closing company or a real estate attorney before closing
Questions to ask the professional
- What exceptions are listed, and what do they mean for me?
- Who chose the title company, and can I shop for it?
Common mistakes
- Not reading the list of exceptions in the title commitment.
- Assuming the lender's policy protects you.
- Losing the policy after closing.
Outside the US or in another state: Who pays for which policy, and how title is handled, varies by state.
Teach this to someone
A one page sheet for showing a friend, a teenager or a parent: what to say, what to show, and one question to check it landed.
Teach: What is title insurance
What to say
Title insurance protects against problems with a property's ownership record, such as an old unpaid lien, a forged signature in a past sale, or an heir no one knew about. A lender's policy protects the lender and is usually required; an owner's policy protects you and is usually optional. Both are generally paid once at closing, and a title search happens first.
What to show
- Ask your closing company when the title search will be done and read its results.
- Look for any liens, easements or claims listed as exceptions.
- Ask what the lender's policy covers and whether an owner's policy is offered.
- Compare the owner's policy cost with what it would protect, and decide.
- Keep the final policy with your closing documents.
Where it stops
Stop and call a professional if the title search shows a lien, a boundary dispute or a claim: ask your closing company or a real estate attorney before closing.
Check question
Who does a lender's title policy protect?
Answer: The lender. An owner's policy is the one that protects you.
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Related skills
Sources
- US federal consumer guidance on mortgage disclosures and closing, 2025. Reviewed September 28, 2026.
Written in our own words from the sources above. It is general information, not advice for your situation; where a professional, your doctor or your lease says something different, follow them.
Last reviewed . First published .