Do I Need to Renew My Title Insurance?

As a realtor, you will have clients reach out to you after the sale or purchase of a home for a variety of reasons. Sometimes it’s to get a copy of important paperwork for tax purposes, or (hopefully) to refer you to their friend who wants to sell their home. One question you can avoid getting later has an incredibly easy explanation: “Do I need to renew my title insurance?

This is a great question a client will have at some point. After all, every other kind of insurance has a renewal or continuing premiums. All insurance protects against risk, and most insurances protect against future risk. As those risks increase or decrease, the needs and premiums of the insurance increases or decreases along with it. Car insurance is the most common example of this type of premium fluctuation.

However, title insurance is different. Title insurance protects against past risk of the property compared to future risk. A title insurance agency will make sure there are no errors in the records, deeds, and financials of your property. If someone tries to collect a debt on the property you didn’t agree to, the insurance policy will cover you. They will even take care of your legal fees if someone disputes your ownership of your property. The policy doesn’t cover the equity you may have in your home, but it does cover the value of your home and property so you don’t take a loss.

Unlike other insurance policies, title insurance is paid once at the closing, and the policy is effective as long as ownership remains in the name of the insured person or their heirs. Information about title insurance will be given to you in the closing documents. Knowing the differences between title insurance and other insurances going into the closing can reassure your clients and give them the peace of mind to know that their investment will be protected. It’s an easy conversation that will give you more credibility and build trust throughout the buying process.