Title insurance protects homeowners from claims against their home that happened before they purchased it, such as a prior owner’s failure to pay taxes or fairly compensate contractors. If you have title insurance, you’ll be covered for legal fees or title disputes that may come up during your time as the homeowner.

There are two kinds of title insurance: Lender title insurance is usually required when selling a home, protecting the lender from any claims made on the house. Owner title insurance is completely optional, but paying this one-time fee will protect you from unexpected issues with the home’s title for as long as you own the house.

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