What should I know about title insurance?

Buying your home is likely one of the largest investments you'll make and a decision that can affect your finances for years to come. The OIC and the National Association of Insurance Commissioners (NAIC) offer information for consumers about title insurance, a topic that is unclear to many people.

What is title insurance?
When purchasing real estate, your lender will likely require you to purchase title insurance.

Title insurance covers you if title problems come up based upon claims prior to when you purchased or refinanced a property. For example, let’s say there is an unpaid mortgage on the property you just bought. Without title insurance, you might have to pay legal costs to settle a dispute. If you lose a dispute, it could cost you money, the equity you have in your home and perhaps even ownership. Title insurance would pay legal costs to settle the dispute and/or to resolve the problem.

Where can I buy title insurance?
You can buy title insurance from a title insurance company or a title agent who sells title insurance. Title insurance companies and agents must be licensed by the OIC to sell title insurance in Washington state.

Many consumers aren’t aware of title insurance until they sign their closing paperwork. You are not required to use the suggested title company or closing agent. You have the right to shop for and choose your provider of title insurance and settlement services.

You'll need to know the purchase price of the property you are buying to make price comparisons on title services. You can search for licensed title companies and make a list of questions to ask title insurers before you sign a contract. Be sure to ask what services and fees are included in the title premium, any separate fees and whether you qualify for any discounts.

Some title insurers may be affiliated with lenders, real estate companies, developers or home builders. Ask the person making the referral if their company is affiliated with the recommended title agent and what they are receiving or not receiving for referring you to the title agent. Federal law requires affiliated relationships to be disclosed in writing.

Read more about choosing and buying title insurance.

More information
Read more about title insurance on our website. Questions? You can contact our consumer advocates online or at 1-800-562-6900.