Title Insurance is protection against loss arising from problems connected to the title to your property.
Title Insurance policies typically insure a homebuyer against any title-search errors or mistakes, and against loss due to disputes over property ownership. Title Insurance can additionally offer protection to the lender under similar circumstances. The cost of title insurance is usually a set value per thousand of dollars of the total loan amount
Is Title Insurance mandatory?
Yes, most of the time, Title Insurance is Mandatory. Especially if you finance the property with a mortgage. It protects the lender, but you pay the premium.
It is always a good idea to have an owners title policy to protect your interests even if you pay cash for a property.
Mortgage Title Insurance protects the lender up to the amount of the mortgage, but it doesn’t protect your equity in the property. For that you need an owner’s title policy for the full value of the home. In many areas, sellers pay for owner policies as part of their obligation to deliver good title to the buyer. In other areas, borrowers must buy it as an add-on to the lender policy. It is advisable to do this because the additional cost above the cost of the lender policy is relatively small.