After many decades of practicing law, a few truths have stood the test of time from my perspective:
Never underestimate the value of a good handshake.
Always read the fine print.
And when it comes to buying property, get title insurance.
Title insurance dates back to the late 1800s, following an 1868 Pennsylvania Supreme Court ruling that led to the establishment of the first title insurance company in 1876. Its continued use today underscores the enduring importance of protecting property ownership through proper title coverage
You would think that with modern recordkeeping, online databases, and increasingly sophisticated real estate transactions, title problems would be a thing of the past. Unfortunately, that is not always the case. While the process has improved dramatically over the years, title issues still arise, and when they do, they can become expensive and time-consuming problems for property owners.
Whether you’re buying your first home, downsizing your home for retirement, or purchasing a building for your small business, it’s one of the most important steps you can take to protect your investment.
Let’s break it down.
What Is Title Insurance?
Title insurance protects you from problems that may not show up right away, but could affect your legal right to own your property down the road.
Before closing, a title company will search public records to make sure the seller actually owns the property and that there are no unpaid taxes, liens, or legal claims against it. This is called a title search.
But even the best searches can miss something. A forgotten heir. An old mortgage that was never officially released. A typo in a deed from 30 years ago. These things happen and when they do, they can cause big headaches.
That’s where title insurance comes in. It acts like a shield, protecting you from financial loss or legal trouble if someone challenges your ownership.
Unlike most insurance policies that protect against future events, title insurance protects against problems that already existed before you bought the property but were unknown at the time of closing. If a covered issue arises, title insurance can help cover legal expenses, defend your ownership rights, and protect you from financial loss.
Real Life Examples
Consider a buyer who purchases property only to discover later that a prior mortgage was never properly discharged from the record.
Or a family that inherits neighboring property and realizes decades later that a boundary line was incorrectly described.
Or a business owner who purchases commercial property and later learns that an old easement limits how the property can be used.
Owner’s Policy vs. Lender’s Policy
One common misconception is that because a lender requires title insurance, the buyer is fully protected.
Not necessarily.
A lender’s title policy protects the lender’s interest in the property, not yours. An owner’s title policy protects your ownership interest and remains in effect for as long as you own the property.
When reviewing closing documents, make sure you understand what type of coverage is being offered and whether owner’s coverage is included.
A Bit of Advice
When you’re buying property, it’s easy to get caught up in the excitement and get overwhelmed by the paperwork. This may lead you to turn down optional offers you are given at your closing. Title insurance is one of those options and I recommend you do not skip this insurance to save a few hundred dollars. This insurance is paid once, at the time of closing. Not monthly. Not yearly. One and done. And it covers you for as long as you own the property.
For most people, real estate is the biggest investment they’ll make. Title insurance helps make sure that investment is secure.
A deep-rooted history and unwavering commitment to client success has made Kocher & Barney a trusted name throughout Ohio. While the firm’s attorneys handle a wide range of legal matters, real estate law – including title issues – is a key area of focus.
**John Kocher spent his career helping people understand the fine print that protects their biggest investments. Before he passed away earlier this year, he had started writing about one of the most misunderstood topics in real estate: title insurance.
KB Attorney Gabriela Toscano had the great privilege of working beside him and completing this article. She worked closely with him for years as he mentored her in his vast expertise of real estate development. This post is both a tribute to his knowledge & legacy and a genuinely useful guide for anyone buying a home.