Do I need title insurance if I'm buying a condominium?

By Insurance.com Posted : 01/01/2011

Yes, you should purchase title insurance to protect your interests, whether you're purchasing a house or a condominium. There are two forms of title insurance--a policy for you, the owner, and a policy for the lender. You'll be required to purchase title insurance for the lender if you take out a mortgage to buy the condominium. The lender's policy protects the lending institution in case a problem with the title occurs. Typically a special endorsement on the policy is required for condominiums.

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You don't have to buy an owner's policy, but it's a good idea. A title search will be completed before the real estate closing to make certain the seller is the rightful owner. Even so, problems can happen. There might be a lien against the property, which didn't show up in the title search, or a missing heir could materialize and claim he's the rightful property owner.

Ramifications of no owner's title insurance

Without an owner's title insurance policy, you'd have to pay for your own legal defense in such a matter, and you could lose title to the condo if the defense failed.

Title insurance would pay your legal costs and either get the matter resolved in your favor or pay your losses if you had to give up title to the condominium.

You pay just one premium for title insurance, which remains in force as long as you or your heirs own the property. Prices vary,  so shop around for the best insurance rates. The American Land Title Association website provides a tool to find a local title company. Check your own state's land title association to see if it offers helpful information. The California Land Title Association, for instance, provides an online tool to compare title insurance rates.

Meanwhile, as you approach the real estate closing for the condominium, you have another insurance matter to address--home insurance for your condo. See "Condo insurance: How much is enough?" to learn about home insurance options for condominiums.


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