Title insurance
Title insurance is insurance against loss from liens and encumbrances on property, defects in its title, and other matters affecting the title or the right to use and enjoy it. It is bought for a one-time premium, and a purchase can carry both an owner's policy and a lender's loan policy.
The buyer's name on one policy, the lender's on the other
On a financed purchase the same parcel can end up under two title policies, each with a different name at the top. One names the buyer. The other names the lender. They insure the same title and protect different people.
A buyer may purchase an owner’s title insurance policy and will be the named insured on that policy. The buyer’s lender will require a loan policy, and that lender will be the named insured on the loan policy.
State Corporation Commission, Bureau of Insurance, Virginia Title Insurance Guide
Two verbs in that passage carry the difference. The buyer may purchase an owner's policy; the lender will require a loan policy. A cash buyer has no lender and so no loan policy, and the owner's policy is still there to choose or pass up. Whether a land buyer in particular carries one is argued out in title insurance on land.
Liens, defects, and the right to use and enjoy the ground
Virginia's insurance code defines the product before any policy describes it, and the definition is wider than liens alone.
means insurance against loss by reason of liens and encumbrances upon property, defects in the title to property, and other matters affecting the title to property or the right to the use and enjoyment of property
Va. Code 38.2-123, defining title insurance
The definition names three kinds of trouble: liens and encumbrances, defects in the title, and other matters affecting the title or the right to use and enjoy the property. Whether an interest someone else still holds in the land, a life estate for instance, is treated as a defect or listed as an exception on a particular policy is for the title insurer to say.
The definition sets the outer boundary of what title insurance is. What a particular policy covers is written in that policy, alongside its own exclusions and exceptions.
The land-records search beneath a policy
A title policy sits on top of a search of the land records, and the two do different jobs.
The title search has its own entry. The search finds what is on the record; the policy then insures against loss on its own terms, and whatever it lists as an exception stays outside it.
Weighing an owner's title policy on a land purchase?
Send the tract you are buying or selling, and Lowell will talk through the purchase with you and point the policy, the premium and its exceptions to the title insurer or settlement agent who quotes them. No cost, no obligation.
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Questions about this term
Does title insurance reach the right to use the land, or only who owns it?
Va. Code 38.2-123 defines title insurance broadly enough to reach both: insurance against loss from liens and encumbrances, defects in the title, and other matters affecting the title or the right to the use and enjoyment of property. That definition describes the kind of insurance, not a given policy. The State Corporation Commission's guide says a policy does not cover losses listed in its exclusions and exceptions, so what a particular policy covers is read in the policy itself.
Does Virginia law say whether the buyer or the seller pays for title insurance?
Not according to the State Corporation Commission's guide, which says local practice, not the law, determines who pays the premium. The same guide says title insurance companies establish their own rates and can negotiate them. For a figure on a particular purchase, the title insurer or the settlement agent handling the closing is the one to ask.
Where this page's facts come from
Every rule, office and figure above traces to one of these. Rules change; check the office before you act on one.
- Virginia Title Insurance Guide State Corporation Commission, Bureau of Insurance
- Va. Code 38.2-123: title insurance defined Code of Virginia