What You Need to Know About Title Insurance

When you buy a home for sale in Lakewood, Long Beach or elsewhere, you’ll have to buy title insurance - it’s typically a lender requirement.

But what is title insurance, and why do you need it?

What is Title Insurance?

Title insurance is a form of indemnity insurance that protects either the homeowner or the lender against financial loss if someone else claims ownership on the property.

There are two distinct types of title insurance. One is specifically to protect the lender (that’s the one the lender makes you buy) and the other is to protect you, the homeowner.

What Happens When You Buy Title Insurance?

Every time a home or property changes hands, someone files a record of the transaction in public archives. Other things that can affect ownership, like liens, are also filed in public archives.

When you buy title insurance, a title company scours those records. The person searching is looking to see who actually owns the property. This action is called a title search.

Problems That Can Pop Up During a Title Search

Sometimes ownership issues come to light during a title search. Maybe there was a filing error in the past, or perhaps someone forged a document somewhere along the way. In some cases, title companies find undisclosed heirs and other issues, too.

When title companies discover issues, they may try to resolve them. However, that’s not always the case.

What Type of Protection Does Title Insurance Provide?

The title search itself helps minimize potential liability - ownership issues come to light before the transaction is completed. However, even the most skilled searchers can miss problems. If that happens, the title insurance defends against litigation that challenges the new owner’s ownership.

How Much Does Title Insurance Cost?

Title insurance is a one-time payment - it’s not a monthly obligation like other types of insurance are. The cost varies quite a bit, depending on your city and the title company you use.

The reason it’s a one-time payment is that the title company is saying, “Here - we did our job and we’re reasonably certain we didn’t miss anything. We’ll cover you if we did.”

Are You Buying a Home in Lakewood or Long Beach?

If you’re buying a home in Lakewood or Long Beach, we can help. Call us at 562-882-1581. Tell us what you want from your next home and we’ll start searching for it right away.