What are “title insurance” and “mortgage insurance”, and are they necessary?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 16, 2021

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Owner’s title insurance will cover you if a problem regarding legal ownership arises that was not discovered during the title search (for example, if an earlier deed was forged, or that side yard you thought you were buying belonged to someone else). The title insurance will pay attorney fees, as well as all other costs in defending the title. Although title problems are infrequent, they could result in the loss of the house, so it can be wise to protect yourself. The bank, or lender, will likely also insist on title insurance to protect its investment – at your expense.

Mortgage insurance protects the lender (usually a bank) against the risk of nonpayment by the buyer. The only reason to buy this insurance is if your lender insists upon it; there is no benefit to anyone except the lender.

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