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What Is Title Insurance?
When you buy a home, you’re not just purchasing the structure – you’re also buying its legal history. Title insurance protects you from financial loss if there are problems, or “defects,” with that legal ownership. A title defect could include:
- Unpaid property taxes
- Liens from contractors or previous owners
- Mistakes in public records
- Missing heirs or unknown ownership claims
In short, title insurance gives you peace of mind that your investment and ownership rights are protected – even if a problem surfaces years after closing.
Why Both Lenders and Buyers Need It
Most real-estate transactions involve two different title insurance policies:
- Lender’s Policy (also called Loan Policy)
- Owner’s Policy
Lender’s Title Insurance
This policy protects the mortgage lender’s interest in the property – not yours.
It ensures the lender has a valid, enforceable lien (mortgage) on the property.
If a title problem arises that affects their ability to collect on the loan, the lender’s policy covers that loss.
➡️ Who pays?
The buyer typically pays for the lender’s policy at closing (a one-time cost), and it lasts until the loan is paid off.
Owner’s Title Insurance
This is the policy that protects you, the buyer.
It safeguards your ownership rights and reimburses you for losses if a covered title issue ever comes up after closing.
➡️ Why it matters:
If someone ever claims ownership of your property, or a previously unknown lien surfaces, the title insurance company defends your ownership in court – and covers the cost if you lose.
How It Works in North Carolina vs. South Carolina
While title insurance serves the same purpose in both states, the process and who issues it differ slightly:
North Carolina
- Attorneys are required to handle real-estate closings.
- The closing attorney performs a title search and issues the title opinion, which the insurance company uses to create your policy.
- You’ll see the cost on your closing disclosure as a one-time premium.
South Carolina
- Like North Carolina, closings are handled by attorneys.
- However, some closing attorneys work directly with title insurance underwriters, while others use an independent title company.
- Again, it’s a one-time cost due at closing, and both lender and owner policies are available.
In both states, the coverage, purpose, and benefits are the same – what differs is mainly who issues the policy and how it’s recorded at closing.
How Long Does Title Insurance Last?
- Lender’s policy: lasts until your mortgage is paid off.
- Owner’s policy: lasts as long as you or your heirs own the property.
You pay for each policy only once, at closing – not annually.
Is Title Insurance Worth It?
Absolutely.
Even with the most thorough title search, errors can go unnoticed. Considering the cost (usually under $1,000 for most homes), it’s one of the best one-time protections you can buy. Think of it this way:
You wouldn’t buy a car without insurance – so why would you buy one of the largest investments of your life without it?
The Bottom Line
Title insurance protects you from the unknowns of a property’s past – unpaid liens, recording mistakes, or even undiscovered heirs – so you can focus on your future in the home. Whether you’re buying in North Carolina or South Carolina, title insurance ensures that your ownership is clear, secure, and backed by professionals who will defend it if something unexpected comes up.
Looking for a Trustworthy Title Partner?
For my clients in both North Carolina and South Carolina, I proudly work with SouthLake Title — our in-house title company. They provide thorough title searches, responsive communication with closing attorneys, and smooth coordination all the way to the closing table.
Whether you’re purchasing a resale home or building new construction, SouthLake Title delivers the professionalism and accuracy you want behind one of the biggest investments of your life.
👉 Learn more or get connected here: SouthLake Title
