One of the most common moments of hesitation I see at the closing table happens when a buyer or seller scans the settlement statement and pauses at the line item for title insurance. Agents know that it is important, lenders require it, and attorneys recommend it, but explaining why it matters can feel surprisingly tricky. Unlike inspections or appraisals, title insurance protects against problems no one can see. And when everything goes right, it can feel unnecessary, until it isn’t.
By Michael Infanti, Esq.
How to Explain Title Insurance to your Client
Title insurance protects property owners and lenders from problems that arose in the past, not from events that happen in the future. Unlike most insurance (such as homeowners or auto insurance), which covers future risks, title insurance looks backward.
Even if a home or improvement was built recently, the land itself may have existed for hundreds of years, and over that time many things can go wrong including undisclosed easements, recording errors, boundary disputes, missing heirs, or prior liens, to name just a few. Some of these issues may not be uncovered during a standard title search.
Title insurance protects the homeowner from those unknown or undiscovered defects in the chain of title. From the beginning of recorded history, up through the date of purchase, title insurance provides peace of mind to the buyer. Their ownership interest is protected.
A Real-World Example of Your Client
Imagine a Buyer purchases a home, and everything appears clean. Months later, they receive notice that a contractor from two owners ago never got paid $100,000 and had filed a valid lien against the property. Without title insurance, the current homeowner could be responsible for paying that lien or even face legal action. With title insurance, the policy steps in to cover the legal costs and, if necessary, the claim itself.
It’s peace of mind for something no buyer expects, but can be financially devastating if it happens.
Common Client Questions and Areas of Concern
“The title search already checks everything. Why do I need insurance?”
How to respond:
A title search greatly reduces risk, but it cannot catch everything. Public records can contain errors, missing documents, or fraudulent filings that don’t surface until later. Title insurance exists to protect the buyer if something slips through despite everyone’s best efforts. Moreover, a title search doesn’t provide any protection to the buyer.
“I’m paying cash, so I don’t need it.”
How to respond:
Cash buyers aren’t required to purchase title insurance, but they are actually taking on more risk by skipping it. There is a reason why every lender requires title insurance. They want protection and the buyer deserves that same protection for their investment.
“I’ve bought homes before and never needed to use it.”
How to respond:
That’s exactly how title insurance works when it does its job well. You don’t buy it expecting a problem, you buy it because if a problem arises, it can be extremely costly witout coverage. Most claims surface years after closing, long after memories and paperwork fade.
“It’s just another closing cost.”
How to respond:
Unlike many closing costs, title insurance is a one-time fee that provides lifetime coverage. When clients compare that to the potential legal fees or loss of ownership rights, the value becomes much clearer.
Final Thoughts of Agents
Your role isn’t to sell title insurance, it’s to educate and protect your clients. When you explain it clearly and confidently, clients feel informed rather than pressured. And when issues arise down the road, they’ll remember the guidance you provided that heped safeguard one of their largest investments.
Your role isn’t to sell title insurance, it’s to educate and protect your clients.