If you are buying a home in New York, title insurance will come up at some point before closing. The short answer: a lender’s policy is almost always required when you take a mortgage, and an owner’s policy, while optional, is one of the strongest protections a buyer can have.
What is title insurance?
Title insurance protects your ownership of a property against problems in its past. Sometimes called land title insurance, it covers issues a title search did not catch, such as a forged signature in an old deed, an unknown heir, or an unpaid lien from a prior owner.
Unlike home or auto insurance, it is a one-time purchase. You pay a single premium at closing, and the coverage lasts as long as you own the home. There are two kinds:
- Lender’s policy — protects the mortgage lender’s interest, up to the loan amount.
- Owner’s policy — protects you, the buyer, based on the purchase price.
Is title insurance required in New York?
If you are financing the purchase, your lender will require a lender’s title insurance policy to protect its investment. That part is not optional.
An owner’s policy is different. It is not legally required in New York, but it is strongly recommended. The lender’s policy protects the bank, not you. Without an owner’s policy, a title problem that surfaces later could leave you paying to defend your own ownership.
Do you need title insurance if you are paying cash?
Yes, it is still worth it. When you pay cash, there is no lender requiring a policy, which also means nothing is protecting you unless you buy an owner’s policy yourself. Paying cash does not make a hidden lien or a missing heir disappear. If anything, an owner’s policy matters more for a cash buyer, not less.
What does title insurance protect against?
An owner’s policy typically covers losses tied to qualifying defects such as:
- Unpaid liens or back taxes from a previous owner
- Errors or omissions in public records
- Forgery and fraud in the chain of title
- Undisclosed heirs with a claim to the property
- Mistakes in prior deeds or legal descriptions
If a covered claim is made against your title, the policy can pay to defend it and cover a resulting loss.
How much does title insurance cost in New York?
Title insurance is a one-time premium paid at closing. The amount is based on the purchase price of the home for an owner’s policy, or the loan amount for a lender’s policy. Because it is a single cost with coverage that lasts as long as you own the home, many buyers see title insurance as a small price for long-term peace of mind. Your attorney or title company can give you an exact quote for your purchase.
Owner's vs. lender's policy: do you need both?
If you have a mortgage, you will have a lender’s policy either way. Buying an owner’s policy at the same time is usually the most cost-effective moment to do it, since the two are often issued together. One key difference: the lender’s policy shrinks as you pay down the loan, while an owner’s policy stays at full value for as long as you own the home.
Title insurance is easy to overlook, because you only feel its value on the day something goes wrong. For most buyers, that one-time premium is inexpensive protection against a very expensive problem.
Frequently Asked Questions
Is title insurance required in New York?
A lender’s policy is required if you have a mortgage. An owner’s policy is optional but strongly recommended.
Do you need title insurance if you pay cash?
It is not required, but an owner’s policy is strongly recommended, since nothing else protects a cash buyer from hidden title problems.
Is title insurance a one-time cost?
Yes. You pay a single premium at closing, and coverage lasts as long as you own the property.
What is the difference between owner's and lender's title insurance?
A lender’s policy protects the bank up to the loan balance. An owner’s policy protects you based on the purchase price.
The bottom line for New York buyers
Because New York handles real estate closings through attorneys, you will have professional guidance on this decision. A lender’s policy comes with financing; an owner’s policy is your choice, and for most buyers, a wise one. If you are buying a home in the Capital Region, our residential real estate team can walk you through your options.
This article provides general information about New York real estate and is not legal advice. For guidance on your specific transaction, consult a licensed New York attorney.