Home Title Insurance vs Home Title Protection: Do You Need Both?

What is home title insurance?

Home title insurance is a policy that protects your ownership of your home against hidden problems from its past. You pay for it once, at closing, and the title company defends you if someone later challenges your right to the home.

Before you buy, a title company searches those records for problems. But a search can miss things, like a forged signature on an old deed or a clerk's error.

First American is one of the largest title insurers. It lists "A forgery 50 years ago" and "an error by a clerk in the county recorder's office" as hidden defects. Problems like these "could cause you to lose your property," it says.

The Consumer Financial Protection Bureau (CFPB) explains it simply. Owner's title insurance "protects the homeowner if someone sues and says they have a claim against the home from before the homeowner purchased it."

What is the difference between owner's and lender's title insurance?

A lender's policy protects the bank's loan, and an owner's policy protects you. Most lenders require the first one. The owner's policy is usually your choice.

Sources: CFPB; NAR; Florida Department of Financial Services.

This matters most after you pay off your mortgage. The lender's policy ends, so only an owner's policy still protects you.

That is worth knowing, because criminals favor paid-off homes. In ALTA's 2026 study, 68% of title firms rated homes owned free and clear as at least a somewhat common target of seller impersonation fraud.

How much does home title insurance cost?

Title insurance costs about 0.42% of the home's price on average, paid once at closing. The National Association of Realtors (NAR) gives that figure, citing Fannie Mae. On a $400,000 home, that works out to about $1,680 (our math).

Prices depend on your state, and some states set the rate by law. Florida is one.

Florida's rule charges $5.75 per $1,000 of coverage for the first $100,000, then $5.00 per $1,000 up to $1 million.

Florida's regulator says a $100,000 owner's policy "should be charging the exact same base premium rate of $575. No more. No less."

Who pays depends on where you live. In California, it's "a matter of local custom and practice and not set by law," the state's Department of Insurance says. Sellers usually pay in Southern California, and buyers usually pay in Northern California.

You can shop around. The CFPB says you can usually pick your title insurer separately from your lender. Buying both policies from the same company usually costs less in total.

In Florida, a lender's policy issued together with the owner's policy starts at $25.

Here is how buying it works. Before closing, the title company searches public records. It sends you a preliminary title report or commitment, which lists what it found and what the policy won't cover.

Ask more than one company for a quote. Also ask about a reissue discount. California's Department of Insurance says you may qualify if the seller can show an earlier owner's policy.

What does title insurance cover, and what doesn't it?

Title insurance covers hidden problems with who owns your home, plus the legal costs of defending your title. It doesn't cover the house itself, things you cause or most things that happen after you buy.

Sources: First American, what title insurance covers and what it doesn't; California Department of Insurance.

First American puts the limits simply: "Things that are not listed in the 'Covered Risks' section of your policy are not covered." It lists the most common exclusions as "government regulations, problems you cause, and future events."

Some exceptions can be removed from your policy. First American says the title company may need a survey, a special title search or a signed statement from the seller. Ask about this if a survey issue or an easement worries you.

Does title insurance cover fraud after you buy?

A standard owner's policy usually doesn't, but an enhanced policy or an add-on can. The answer depends on which form you bought, and many owners don't know which one they have.

There are two main policy forms, both written by the American Land Title Association (ALTA), the title industry's trade group:

ALTA created the Homeowner's Policy in 1998, says ALTA CEO Chris Morton. He adds that it "hasn't been approved by regulators" in some states.

In 2025, ALTA added two add-ons, called endorsements, for forged deeds and mortgages. ALTA's own article, from June 23, 2026, explains them:

• ALTA 49 is added when you buy an owner's policy. It covers a forged deed or mortgage recorded after the policy date in which someone posed as you.
• ALTA 49.1 is for owners who already have an ALTA Owner's Policy. Coverage starts on the date you add it and covers only forgeries recorded after that.
• Both work only for homes with one to four units, owned by people or certain estate planning entities. Land with no home on it doesn't qualify.
• Availability and price vary by state and by insurer, as insurers file them state by state.

The FBI suggests checking. Its June 2026 warning about criminals selling land they don't own tells owners to "Review your title insurance policy coverage and check for post-policy protection."

Here is how to check yours:

How is title insurance different from title lock or title protection?

Title insurance pays to defend your ownership, and title protection watches your records. "Home title protection" usually means a monitoring service that alerts you when a new document is filed on your home. It is not insurance.

The Federal Trade Commission (FTC) warns that services sold as "title lock insurance" are monitoring, not insurance. It says they tell you about a transfer only after it has happened, and that some areas offer free alerts. Our guide to title lock insurance explains these services in detail.

Sources: First American, Old Republic Title, ALTA, FTC, August 26, 2024. Free alerts are not offered in every county.

The timeline shows when each one does its work.

1. Before closingTitle search. The title company checks county records for liens, forged deeds and errors.
2. Closing dayYou buy your policy. You pay once for the owner's policy, and your lender's policy if you have a loan.
3. Policy dateThe line in time. A standard policy covers problems from before this date. Enhanced coverage and ALTA 49 also cover certain forgeries after it.
4. Years laterA forged deed is filed. An alert tells you it happened. Only a policy with forgery coverage pays to undo it.

If a fake deed is ever filed, the fix is the same either way: a court case. Our guide on what to do if a fraudulent deed is filed walks through each step, from the police report to the lawsuit.

Do you need both home title insurance and title protection?

Most owners need their title policy plus a way to hear about new filings, and the alert can be free. What else you need depends on your policy and your property.

Start with the free steps in our guide to protecting your home title for free. Then compare paid options in our guide to home title protection.

Frequently asked questions