What is a title insurance policy, and do I need one?

A title insurance policy protects the homeowner and/or lender against financial loss resulting from defects in a property's title that were not discovered before closing. Defects can include errors in public records, undiscovered liens, forged documents, unknown heirs with a claim to the property, or boundary disputes. Unlike most insurance, which protects against future events, title insurance protects against past events that may affect your present ownership.

In New York, there are two types of title insurance: a lender's policy (required by virtually all mortgage lenders, covering the loan amount) and an owner's policy (optional but strongly recommended, covering the full purchase price). In the Western Catskills, where properties in Delaware, Otsego, Greene, and Ulster counties often have long and complex ownership histories — sometimes stretching back to the original land grants of the 18th and 19th centuries — the owner's title insurance policy is a genuinely valuable protection. It is a one-time premium paid at closing and provides coverage for as long as you or your heirs own the property. Given the relatively modest cost relative to the protection it provides, most real estate attorneys in the region strongly recommend purchasing an owner's policy.