Title Insurance Explained: What It Is and Why You Need It
Title insurance protects you and your lender from defects in the property's history that weren't discovered before closing — unpaid taxes, undisclosed liens, forged deeds, or other claims against ownership.
What You'll Learn
- Owner's title insurance vs. lender's title insurance
- What title insurance covers
- What it doesn't cover
- How the title search works
- One-time premium vs. ongoing mortgage insurance
The Full Explanation
Understanding title insurance helps borrowers appreciate its value. Unlike other insurance, title insurance is a one-time premium at closing. CTC Processing reviews the title commitment on every file to catch issues before they become closing delays.
Frequently Asked Questions
Do I need owner's title insurance?
Lender's title insurance is required. Owner's title insurance is optional but strongly recommended — it protects your ownership interest for as long as you own the property. The incremental cost is small relative to the risk.
What does title insurance NOT cover?
Title insurance doesn't cover: defects you knew about and didn't disclose, boundary disputes that a survey would reveal, and issues arising after the policy effective date.
How much does title insurance cost in Colorado?
In Colorado, title insurance premiums are regulated and vary by transaction price. On a $500,000 purchase, combined lender's and owner's premiums are typically $1,500–$2,500 total (one-time cost at closing).