Do I Need Title Insurance? Is It Worth the Cost?

When you buy a home, you’re buying more than the house itself. You’re also buying the legal right to own it, which is called “title.” Before closing, a title company searches public records to make sure the seller actually has the right to sell, and that there are no unpaid liens, judgments, or other claims against the property. Even a careful search can miss some problems, though. A forged signature on an old deed, a missing heir from a past estate, a recording error at the courthouse, or an undisclosed lien can surface years after you move in.

Title insurance protects you from these hidden problems. There are two types. A lender’s policy is typically required if you’re getting a mortgage, and it protects the bank’s interest in the property. An owner’s policy protects you, your equity and your investment, for as long as you or your heirs own the home. If a covered claim arises, the title insurer pays to defend your ownership in court and covers losses up to the policy amount.

So is it worth it? Absolutely. Unlike car or homeowner’s insurance, an owner’s title policy is a one-time premium paid at closing, not a monthly or yearly bill. When you compare that single cost to the value of your home, and to the cost of defending a title dispute without coverage, the peace of mind is well worth it.

Cecelia Adams owns and operates RSI Title. She has over 20 years of experience in the title industry and has conducted thousands of real estate closings in Maryland and the District of Columbia.

301-610-7777
cadams@rsititle.com
www.rsititle.com

This article is for general informational purposes only and is not legal or tax advice. Every situation is different, and laws vary by state. Please consult a licensed attorney or qualified tax professional regarding your specific circumstances.