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  • Blue Pointe Title

3 Differences Between Title Insurance and Home Insurance

Updated: May 10, 2023


old victorian home with iron gate and trees

When it comes to protecting your house, two things come to mind: title insurance and homeowner’s insurance. You will likely face both of them at your closing. And while, yes, they are both there to benefit you and your home, they do so in vastly different ways.


It is important to understand how your home is protected by each. So, let’s take a look at what title insurance and homeowner’s insurance are - and the differences between them.


1. Same Home, Different Protection


The way that title insurance and homeowner’s insurance protect your home is different. Simply put, with title insurance, you are protecting yourself from things that happened before you took ownership of the property - things you don’t yet know about. Homeowner’s insurance, on the other hand, protects against things that may happen in the future.


For instance, title insurance protects against defects in title, such as a forgery, erroneously recorded documents, undisclosed liens, and easements. Homeowner’s insurance protects you from natural disasters or theft, including damage to the contents inside the home as well as structural damage, injury to guests and so forth.


2. Paying for Protection


Another significant difference between the title insurance and homeowners insurance is how you pay for them.


Homeowner’s insurance can be compared, in a sense, to other types of insurance like health insurance or car insurance. You pay a premium at regular intervals to maintain your coverage. This could be monthly. Quarterly, semiannually, or annually. Regardless of the frequency, when you stop paying for coverage, you are no longer protected.


Title insurance involves one payment. A title insurance policy is purchased at closing - and that is the only cost you will incur. You will continue to be protected by this insurance for as long as you have an interest in the property.


Keep in mind that there are different types of title insurance, such as an owner’s policy and a lender’s policy. If you purchase both, you will have two premium payments to make, but only at closing.


3. Different Avenues to Coverage


In order to obtain a title insurance policy, your title company will perform a title search. This is a deep dive into the chain of title since the beginning of the property’s existence as well as all the recorded documents that go along with it. This will confirm that the property doesn’t have any judgments, liens, or other encumbrances - and also that the seller has the right to sell you the property.


If all is clear, a title insurance policy can be issued.


A homeowner’s insurance policy involves checking out rates with different companies and usually undergoing a home inspection. This helps the insurance company to know exactly what they are insuring and to determine their rate.


Title Insurance at Blue Pointe Title


Blue Pointe Title Agency offers you title insurance when you need it. But not only will we perform a thorough title search in order to provide you with the confidence that you are purchasing a home with a clear title, we are also with you every step of the way so that you can expect a hassle free closing.


To learn more or to get started, contact us today at (517) 258-1511.


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