What Is Title Insurance?   In Massachusetts and New Hampshire, the policy that protects the lender is called Lender's Title Insurance. The buyer pays the premium for this policy, even though the policy benefits only the lender.  However, when one is purchasing a home, the buyer will be given the opportunity to purchase Owner's Title Insurance. This policy will protect the buyer.  The purchase of an owner's policy is entirely optional, but it's good protection that you will want to seriously consider.  If a buyer elects Owner’s Title Insurance, the cost is beyond our low fixed Lender’s Title Insurance cost of $200.00.   What's covered by title insurance???   Owner's title insurance protects you from:     Fraud associated with the title ownership   Liens existing against the property at the time the policy was issued   Mistakes in the public record that are not caught before the sale   Types of Credit Used   Inaccurate or conflicting wills and trusts related to the title   Missing heirs who suddenly appear and claim to own the property   Forged or misfiled deeds and other documents   Errors or flaws in the title that are not discovered during the initial title examination   Lender's Title Insurance covers the amount of the mortgage loan and protects the lender's interest in the property if any of the above risks occur. Lender’s Title Insurance does not protect the homeowner or one buying property.   What is a title search?   Very simply, it's the process of examining available records related to the property to make sure that the seller is the legal owner and that there are no outstanding claims against the property. When a buyer or home owner pays for a title search, that does not mean that the title is clear or that the attorney will clear defects in title.     What is the likelihood of there being a title problem that is not covered by the attorney's certification when I purchased the property?   The likelihood is not great, but the financial ramifications could be devastating. It can be expensive and time consuming to cure even simple title problems, and if a problem can't be solved, the financial loss could be borne solely by the owner of the property.   What does title insurance do if a covered title problem is discovered?   The title insurance company has the option either to cure the problem at no cost to the policyholder or pay the policyholder for the loss sustained, subject to any applicable deductibles or liability limits, exclusions from coverage or exceptions. Also, if the problem is discovered at the time you are selling or refinancing the property, the company will generally agree to insure the future purchaser or lender, so as to allow the sale or refinance to occur.   Can I buy title insurance from my local insurance agent for less money?   No, title insurance can only be purchased from an approved title insurance agent. The premium rates are set by the company.   How much does owner's title insurance cost?   It depends on the amount of the sales price. However, if you buy the owner's policy when you pay for the lender's policy, there can be a substantial savings. Your good faith estimate will provide the quote if the mortgage is being use for purchasing property. If the mortgage is a refinance, the quote for Owner’s Title Insurance will not be on the good faith estimate. You can also call for a quote of the optional Owner’s Title Insurance policy.   How long is an owner's title insurance policy good for, and do I have to pay annual premiums to keep it in force?   Owner's title insurance is in effect for as long as you own the property. The policy even provides coverage after you sell your property if you're sued on warranty covenants in your deed for matters you are not responsible for. Moreover, the premium is a one-time payment and, unlike other kinds of insurance, no additional premium is due after the policy is purchased.   Do I need to purchase a new policy when I refinance?   You do not need a new owner’s policy, but the lender will require you to purchase a new lender policy.  Even if you refinance with the same lender, the existing lender’s policy terminates when you pay off the mortgage. Furthermore, the lender is concerned about title issues that may have arisen since you purchased the property, such as the lien mentioned in an earlier question.  A new title search will uncover the lien, and you will have to pay it off as a condition for the refinance.