Title insurance

Title insurance is a one-time-premium insurance policy that protects against losses from defects in a property’s title — problems with the legal ownership itself rather than the building. Covered risks typically include title fraud (someone fraudulently mortgaging or selling your home), unknown liens left by a previous owner, encroachments and certain survey defects, and errors in public records. Policies come in two kinds: a lender’s policy, protecting the mortgage holder, and an owner’s policy, protecting the buyer for as long as they own the home.

Why it became standard practice

Title insurance largely replaced the older routine of ordering a new survey for every purchase, because a policy is usually cheaper and faster than a survey and covers a broader set of title risks. Title fraud is the coverage that gets the headlines — cases where a fraudster impersonates an owner and mortgages or sells the property — and an existing owner can buy a policy after closing precisely for that protection.

What it doesn’t do

It is not a warranty on the house. Physical condition, renovations done without permits you were told about, zoning you should have checked — exclusions vary by policy, and known defects listed on title before you bought are generally excluded. Your lawyer reads the policy; the deed and title records say who owns what; the policy pays when what the records said turns out to be wrong.

Why it matters for your practice

Buyers hear “title insurance” for the first time on their lawyer’s statement of adjustments and often confuse it with home insurance. A clear explainer — what it is, the lender-vs-owner distinction, the fraud story — is honest closing-cost content that saves the confused phone call in the week before closing.