What is the “title insurance premium”?

The title insurance premium is defined as a one-time fee paid for a title insurance policy. This fee is typically charged at the time of closing when a property is purchased. The purpose of this premium is to secure the title insurance policy, which protects the property owner and the lender against potential losses that may arise from defects in the title, such as liens, encumbrances, or the property being claimed by another party.

This one-time payment covers the cost of conducting a thorough title search to ensure that the title is clear and free of issues before the sale is finalized. Unlike recurring fees, such as property taxes or homeowners' insurance premiums, the title insurance premium is only paid once and lasts for as long as the owner or their heirs hold an interest in the property, providing valuable long-term protection.