Although title insurance is insurance, several things make it different from other insurance:

  • You only pay for it once.
  • It can protect you for decades without costing a penny more.
  • Government-set prices remove the need to price shop.
  • You can’t be dropped for filing too many claims.
  • This unique policy protects you from past events; all other insurance products protect against future events.

Essentially, title insurance is “set it and forget it:” Buy it once and you’re protected from title-related issues as long as you own your home.

In most cases.

But many homeowners have questions about whether a title insurance policy needs to be updated due to marriage or divorce. If children or other heirs inherit the property, do they need to pay for a new insurance policy? If home buyers buy a title policy to protect the lender, will they have to buy another policy if they refinance the home or the loan is taken over by another lender?

Here’s what you need to know.

Lender’s Title Insurance Policy: One and Done

If you borrowed money via a mortgage, as the vast majority of homebuyers do, your lender probably required you to buy a title insurance policy to protect its financial interest in your home. (Note that this only protects the lender. It is highly recommended that you also purchase your own policy to protect yourself.)

You only need to buy this policy once unless you refinance your home or get a home equity loan or line of credit. If the lender sells your mortgage loan to another lender and you receive a notice that you need to send your payment to the new lender, no new policy is needed.

Note that some lenders may waive the title insurance policy fee or other fees to gain your business when refinancing or applying for a home equity loan or line of credit.

Buyer’s Title Insurance Policy: It Depends

Generally, a change in ownership will mean the buyer or buyers are no longer protected by title insurance and should purchase a new policy. But not always.

If an owner is dropped from the deed—for instance, because of death—the remaining owner won’t have to buy a new policy. The same title insurance that protected Mr. and Ms. X will still protect Ms. X if Mr. X dies.

But if both owners die and the house is inherited, the new owners will have to buy their own title insurance policy. If the owners divorce and one buys the other’s share, the new owner will need to purchase a new policy.

If an existing owner adds someone to the deed, the policy will need to be updated,

And if a home is sold, the new owners will have to purchase their own policy. Policies can’t be transferred.

One change that never requires a new policy: paying off the mortgage. If the name on the deed is the same, the title insurance policy will still provide protection.

Not Sure? Ask a Title Insurance Expert

When in doubt, ask the title company whether a policy needs to be changed or a new one should be purchased. There’s no penalty for asking. But there’s a huge risk to not asking: a policy could no longer be in force because of a change, and the owner would have no idea until a title issue arose.

That’s not the time to find out you don’t have title insurance protection.

Why Cornerstone

Because title insurance rates are set by the government, all title insurance companies will charge similar fees. (You can estimate the title costs for any property you’re considering here.) That’s why it makes sense to choose a title company based on the services and support they provide. Although a lender or agent may suggest a title company, the buyer has the power to make that decision.

Involve Cornerstone early in the process, and you have a partner who can make the entire transaction smoother and easier. We can recommend vetted professionals for every type of real estate service. With the experience gained from over 16,000 transactions, we know which professionals share our values of efficient, ethical, responsive, and proactive service.

We have no business relationship with the professionals we recommend and earn no commissions or fees.

There’s a reason why Cornerstone has a five-star rating from Google reviews. The earlier you include us in the buying process, the more we can help. If the American Dream of homeownership is important to you, please let us help you make your dream a reality.