When you buy a home, you are really buying the title: the legal right to own and use the property. Before closing, a title search combs through public records for claims against that right. At most Fairfax and Ashburn closings you will see two insurance policies on the settlement statement. The lender's policy is the one your mortgage lender requires, and it protects the lender's money, not yours. The owner's policy is optional, and it protects you. In Virginia it is customary for the buyer to pay for both, though the contract can assign the cost to the seller.
What exactly is being insured against? The problems a search can miss: an old lien that was never released, a deed signed by someone who had no authority, a forged document in the chain of title, a recording error at the courthouse, or an heir nobody knew about showing up with a claim. These issues are uncommon, but they come from any point in the property's history, and without coverage you would pay your own legal bills to fight them. In Alexandria and across the Commonwealth, an owner's policy pays those defense costs and covers your loss up to the price you paid for the home.
The reason the lender's policy is not enough is simple. It protects only the lender, and its coverage shrinks as you pay the loan down. Your equity is what keeps growing, and the lender's policy does not protect a dollar of it. The owner's policy works the other way: it covers the full purchase price, and it stays with you for as long as you or your heirs own the home. One more detail buyers like: unlike homeowner's insurance, title insurance is a one-time premium paid at closing, with no monthly or annual bills.
Two practical notes. First, title insurance is one of the closing costs you can shop: premiums differ between settlement companies, and buying the owner's and lender's policies together is usually cheaper than buying them separately. Second, standard and enhanced policies exist, with the enhanced version covering a few extra risks, so ask your settlement agent which one you are being quoted. Confirm the final numbers on your Closing Disclosure before closing day. If any of this feels unfamiliar, have your agent walk the title line items with you: it is a small part of the paperwork that protects the largest purchase you will make.
FAQ
Is title insurance required in Virginia?
The lender's policy is required by most mortgage lenders. The owner's policy is not required by law in Virginia, but it is strongly recommended: without it, only the lender is protected if a title problem surfaces after closing.
Who pays for title insurance at a Virginia closing?
Virginia custom has the buyer paying for both the lender's and owner's policies, but it is negotiable. Your contract sets the final split, and a seller can agree to cover title costs as part of the deal. Check your Closing Disclosure before closing to confirm the charges.
What does title insurance cover?
Problems that existed in the title before you bought: old liens, forged or improperly executed documents, recording errors, undisclosed heirs, misinterpreted wills, and easement disputes. Standard policies cover the common ones; enhanced policies add coverage for extra risks like unrecorded liens.
Can I shop for title insurance in Virginia?
Yes. The premium is set by the insurer, so the fee can vary between settlement companies. Your lender will recommend a provider, but you can compare quotes. Buying the owner's and lender's policies from the same company is usually cheaper than buying them separately.