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Is title insurance really necessary or just another closing scam?

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Borislav_W
Joined:
16.09.2024
Posts: 1445
Topic Starter
12.01.2025 06:12
I'm currently in the process of closing on my first home, and my lender is pushing hard for me to purchase an owner's title insurance policy. The closing costs are already adding up so quickly, and I'm honestly wondering if this is a legitimate requirement or just another way for the title company to squeeze more money out of me. I've done a title search, so isn't that supposed to cover any potential issues anyway? Has anyone here ever actually had to use their title insurance, or is it generally considered a waste of money for a standard residential purchase?
15 replies in this topic
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ZlatnaRuka
Joined:
26.08.2022
Posts: 1727
27.01.2025 02:23
It is definitely not a scam, but it is one of those things you hope you never have to use. Think of it as a safety net for your biggest investment.
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damian_varna
Joined:
12.11.2020
Posts: 255
04.02.2025 14:56
In reply to a previous post
I used to think it was a waste of money until my neighbor found out there was an unrecorded lien on her property from a contractor the previous owner never paid. The title insurance saved her thousands.
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iztrit_potrebitel
Joined:
21.10.2019
Posts: 2113
17.02.2025 12:18
In reply to a previous post
Lender's title insurance is mandatory, but owner's title insurance is optional. If you are tight on cash, you can technically skip it, but I wouldn't recommend it.
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kris_1982
Joined:
24.04.2022
Posts: 833
26.02.2025 07:49
In reply to a previous post
I skipped it on my first house ten years ago to save money. Looking back, I realize how lucky I was that nothing popped up. I wouldn't take that risk again.
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Martin_85
Joined:
30.11.2023
Posts: 768
11.05.2025 00:09
The title search only covers what is public record. What happens if there's a forgery, a missing heir, or a clerical error that wasn't filed correctly? That's what the policy covers.
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Filip_G
Joined:
14.04.2023
Posts: 631
27.06.2025 14:56
Total scam? No. Overpriced? Maybe. But the peace of mind is worth the one-time fee in my opinion.
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radek_sofia
Joined:
28.06.2022
Posts: 2395
02.07.2025 01:35
In reply to a previous post
Just remember that the lender's policy only protects the bank, not you. If someone comes forward claiming they own part of your land, the bank is safe, but you are out on the street without that owner's policy.
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Kevi_M
Joined:
24.02.2020
Posts: 63
20.07.2025 12:48
In reply to a previous post
Is it really necessary? Only if you want to be 100% sure you actually own the house you're buying. It's a one-time payment for as long as you own the home.
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Marius_C
Joined:
11.02.2024
Posts: 2326
28.07.2025 16:42
I work in real estate and I have seen enough horror stories to tell you: buy the insurance. It's pennies compared to the potential legal fees.
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SivaMishka
Joined:
08.04.2023
Posts: 26
17.08.2025 21:26
In reply to a previous post
Shop around! You aren't obligated to use the title company your lender recommends. You can save a few hundred bucks by getting quotes from other local title companies.
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vulk_samotnik
Joined:
16.08.2020
Posts: 1516
01.09.2025 06:30
I've bought three homes and never had an issue, so I've always felt like it was money down the drain. Still, I buy it every time because I'm paranoid.
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robert_d
Joined:
12.10.2022
Posts: 2499
28.10.2025 07:15
In reply to a previous post
If you are buying a brand new construction, the risks are lower, but for an older home, it is almost mandatory in my book.
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Yulia_M
Joined:
02.03.2021
Posts: 748
05.11.2025 08:38
In reply to a previous post
I actually had to file a claim once. It took a while to resolve, but the insurance company handled all the legal work and paid the claim. I would have been bankrupt otherwise.
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mati_123
Joined:
21.04.2024
Posts: 2139
25.12.2025 12:04
In reply to a previous post
The title company is definitely trying to upsell you on some things, but the core owner's policy is legit.
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lubopiten_k
Joined:
24.07.2025
Posts: 1931
29.01.2026 13:52
In reply to a previous post
It's a gamble. Most people never use it, but when you need it, you really need it. Good luck with the closing!

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