Title insurance: what it covers and what it does not

Title insurance is a one-time policy purchased at closing that protects your ownership. It typically covers title defects discovered later, existing liens missed in searches, title fraud, some zoning and work-order problems, and certain survey or encroachment issues.

What it does not cover is physical condition. A leaking roof, a failing furnace or an old septic system is not a title matter, which is why an inspection is still necessary.

Because the premium is small relative to the exposure and most lenders require lender coverage anyway, the practical question is usually whether to add owner coverage. In almost all residential purchases, the answer is yes.