Somewhere in the stack of paperwork at closing, most buyers in Centerville and Washington Township sign off on a title insurance policy without fully understanding what it does. It’s one of those closing costs that gets mentioned early and then shows up again at the closing table, so it’s worth knowing what you’re actually paying for.
What Title Insurance Actually Protects
Title insurance protects you against problems with the property’s ownership history that weren’t caught before closing. That can include an old lien that was never properly released, a mistake in public records, an undisclosed heir with a claim to the property, or a forged document somewhere in the chain of ownership. These issues are uncommon, but when they surface, they can call the validity of your ownership into question — which is exactly what the policy is there to cover.
Owner’s Policy vs. Lender’s Policy
There are typically two separate title policies in a purchase. The lender’s policy protects the mortgage company’s financial interest in the property and is required if you’re financing the purchase. The owner’s policy protects you, the buyer, and is optional — though most real estate agents and title companies recommend it. The lender’s policy doesn’t cover your equity in the home, so without an owner’s policy, you’d be on your own if a title issue came up after closing.
How a Title Search Fits In
Before any policy is issued, a title company performs a title search, which traces the property’s ownership history through public records to check for liens, judgments, easements, or other claims. Most issues get resolved during this search, well before closing. Title insurance exists for the rare problem that the search doesn’t catch — something hidden or unrecorded that only comes to light later.
What It Costs and When You Pay It
Title insurance is typically a one-time premium paid at closing, rather than an ongoing cost like homeowners insurance. The exact amount depends on the purchase price and the title company you use. In Ohio, it’s common for this cost to be split between the buyer and seller as part of the purchase negotiation, though the specifics vary from contract to contract. Your title company or closing agent can break down the exact figure as part of your closing disclosure.
Frequently Asked Questions
Is title insurance required to buy a home?
A lender’s title policy is required if you’re taking out a mortgage. An owner’s policy is optional, but it’s the only one that protects your own financial stake in the property.
How long does title insurance coverage last?
An owner’s title policy typically remains in effect for as long as you or your heirs hold an interest in the property, with no renewal or ongoing premium required after the initial payment.
Can I choose my own title company?
In most cases, yes. Buyers in Ohio generally have the right to select their own title company rather than automatically using whichever one the seller or lender suggests, though it’s worth discussing the choice with your agent.
Kelly Nation is a real estate agent with RE/MAX Alliance serving Centerville, Ohio, Washington Township, and the greater Dayton area. Thinking about buying or selling in the area? Reach out to Kelly Nation with RE/MAX Alliance at 937-609-5852 to get started.
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