Why Should I Care About Title Insurance?
You just dropped 6 figures on a property. You’ve got big plans. Then boom—some long-lost heir pops up claiming granddaddy never sold the land. Or a contractor hits your mailbox with an unpaid lien from five years ago. That’s where title insurance comes in. It’s not about if something goes wrong—it’s about when. Title insurance 101: what it covers and why you still need it comes down to one brutal truth: real estate ownership is messy. Here’s the difference between thinking you own a property—and legally owning it without anyone able to challenge your rights:
- Title search: A deep dive into public records, tax liens, wills, and previous deeds to tell you if there’s anything sketchy.
- Title insurance: Protection against whatever gets missed during that search… including stuff that hasn’t shown up yet.
That’s the key difference between a title search and title insurance. Title searches are prevention. Title insurance is protection.
Example Time: Real People, Real Problems
We once did a deal on a triplex in Columbus, Ohio. Everything checked out. Clean title search. Tenant estoppels signed. Ready to close. One week later—we get a letter from a sister of the previous owner claiming she never signed off on the sale of the property… because she legally had a 50% stake. Guess what saved us? Our owner’s title insurance policy. The insurer stepped in. Hired attorneys. Took care of the issue. We didn’t lose a dime—because we paid for protection upfront.
What Title Insurance Actually Covers
This is where most people get confused. “What does title insurance even protect me from?”
Title insurance 101: what it covers and why you still need it includes these common issues:
- Errors in public records: Misspelled names, bad legal descriptions, incorrect ownership transfers.
- Unknown heirs: Think someone passed away and now cousins you’ve never met crawl out of the woodwork.
- Forgery/fraud: Fake signatures, forged deeds, sellers who didn’t legally own the house to begin with.
- Undiscovered liens: Old contractor bills, unpaid taxes, or previous mortgages that weren’t recorded properly.
- Boundary or access disputes: Your neighbor “borrowed” 10 feet of your property line, and now they think it’s theirs.
Here’s the kicker—you don’t just get sued because you did something wrong. You get sued because someone else messed up before you.
The Two Types of Title Insurance
| Policy Type | Who It Protects | Key Benefits |
|---|---|---|
| Owner’s Policy | You (The Buyer) | Protects your equity and ownership rights |
| Lender’s Policy | The Mortgage Lender | Protects their loan investment |
Think of it like this—your bank won’t fund a home loan without protecting itself. Why should you?
But Wait—Didn’t the Title Search Catch All That?
This is where people get caught up. “We already did a title search. We’re good, right?”
No matter how deep your title search goes, it can’t detect:
- Forged documents filed legally years ago
- Clerical errors in old county books
- People who aren’t dead (but probate court thought they were)
- Unrecorded easements letting others use your land
Even experienced investor pros get hit with claims. This isn’t amateur hour stuff—it’s just the real world of real estate.
Is Title Insurance a One-Time Thing?
Yes. You pay for it once at closing, and it covers you for as long as you own the property. Zero recurring payments. No monthly premiums. Just a single upfront premium that can save your backside for decades.
FAQ: Title Insurance Basics
1. Is title insurance required?
Nope—not for you as the buyer. But your lender will require it to cover their stake. You’d be nuts not to cover yours too.
2. How much does title insurance cost?
It varies by state and price of the property, but on average it ranges from $500–$2,000. Worth every penny.
3. Do I need it for a cash deal?
Absolutely. Just because you’re not borrowing money doesn’t mean problems won’t show up later. Protect your investment.
4. What’s the difference between a title search and title insurance again?
Short answer: Search finds current issues. Insurance protects you from past ones that weren’t discovered.
5. Can I choose my title company?
Yes—and you should. Shop around for reputable providers. If you’re working with a real estate pro or experienced investor, they’ve probably got vetted contacts.
Get Smart: Protect Your Real Estate Plays
If you’re gonna drop your life savings (or investor capital) into real estate, don’t cheap out when it matters most.