Real estate title insurance protects you from flaws or gaps in the real property title. It's essentially preventative law. You purchase the insurance to protect yourself in case it turns out that the title you purchase isn't whole or all that it appears to be.

Get started Ask a Lawyer a Question You'll hear back in one business day.


Whenever you decide to purchase a piece of real property, you run the risk that it could come with encumbrances or defects in the title that will cost you far more than you anticipated. If, for instance, the previous owner owed back taxes on the property and you are in a state where the taxes on the property pass with the title, then you are on the hook for all of those taxes. Real estate title insurance helps you to cover those fees.

Getting title insurance is often a good way to determine whether the property is in a solid legal position. According to the ABA's handout, "Defending Your Title," most real estate title insurance companies perform their own research on the real property to determine its legal position. If it turns out that there are legal uncertainties about the property, then they won't insure it because it's too big a risk. If the property you're looking into raises those kinds of red flags, you would be wise to reconsider it or to obtain additional assurances from the seller to protect your interests. In some cases, either party may insist on title insurance being part of the deal. Often times, it costs a little over a thousand dollars, and that money is nonrefundable. However, if it turns out that there is a problem with the title, the insurance company will cover your losses and help you become whole again. To get this insurance, you will generally go through your real estate agent as most banks and lending institutions do not offer such options.

Get started Ask a Lawyer a Question You'll hear back in one business day.

Get started Ask a Lawyer a Question You'll hear back in one business day.