Title Insurance in Pennsylvania — What It Covers and Why It Matters
Title insurance is one of the least understood costs in a Pennsylvania real estate transaction and one of the most important protections a buyer can have. Most buyers pay for it without knowing what it does. Most sellers don't think about it at all. Understanding what title insurance actually covers — and what happens when there is a title problem — changes the way you think about it.
Questions about title insurance in Pennsylvania?
Josh Wernick - REALTOR®
Text or call · Same-day response · Keller Williams Real Estate
What Title Insurance Covers
Title insurance protects against defects in the ownership history of a property — problems with the chain of title that existed before you purchased the home. These are not future problems. Title insurance covers past events that could affect your ownership rights after closing.
Covered title defects include undisclosed heirs who claim ownership interest, forged or fraudulent deeds in the chain of title, errors or omissions in prior deeds, unpaid liens or judgments attached to the property that were not identified at settlement, boundary disputes arising from survey errors, and prior owners who were improperly removed from title — such as a spouse whose signature was forged on a deed.
What title insurance does not cover: future liens, future encumbrances you create after purchase, and issues that a proper survey would have revealed if one was conducted.
The Two Types of Title Insurance in Pennsylvania
Owner's policy
The owner's title insurance policy protects the buyer's ownership interest in the property. It covers the full purchase price and remains in effect for as long as you or your heirs own the property. In Pennsylvania, the buyer typically pays for the owner's policy as part of closing costs. A one-time premium at closing — no ongoing payments.
Lender's policy
When a buyer uses mortgage financing, the lender requires a separate title insurance policy protecting their loan amount — not the buyer's equity. The lender's policy decreases as the mortgage balance is paid down and expires when the loan is paid off. It protects the lender, not the buyer. The buyer pays for it.
A buyer who purchases title insurance only at their lender's requirement — and does not obtain an owner's policy — has a property with no title protection for their own equity. In Pennsylvania, obtaining the owner's policy at closing is standard practice and strongly advisable.
How Title Search and Title Insurance Work Together
Before issuing a title insurance policy, the title company conducts a title search — a review of the public record to trace the chain of ownership, identify any existing liens, judgments, or encumbrances, and confirm that the seller has clear authority to transfer ownership. The title search identifies known issues before closing. Title insurance covers issues the search did not and could not find.
Who Pays for Title Insurance in Pennsylvania
In Pennsylvania, the buyer typically pays for both the owner's title insurance policy and the lender's title insurance policy as part of closing costs. Title insurance premiums in Pennsylvania are regulated by the state — rates are set and do not vary significantly between title companies for the same coverage amount. The cost is based on the purchase price for the owner's policy and the loan amount for the lender's policy.
Frequently Asked Questions — Title Insurance Pennsylvania
What is title insurance in Pennsylvania?
Protection against defects in the ownership history of a property — problems with the chain of title that existed before you purchased the home. Covers undisclosed heirs, forged deeds, unpaid liens not identified at settlement, boundary disputes from survey errors, and other historical title defects. A one-time premium paid at closing. Two types: owner's policy protecting the buyer and lender's policy protecting the mortgage lender.
Who pays for title insurance in Pennsylvania?
The buyer typically pays for both the owner's title insurance policy and the lender's required policy as part of closing costs. Title insurance premiums in Pennsylvania are state-regulated. Costs are based on purchase price for the owner's policy and loan amount for the lender's policy.
Is title insurance required in Pennsylvania?
The lender's title insurance policy is required by virtually all mortgage lenders as a condition of the loan. The owner's title insurance policy is not legally required — but is strongly advisable. A buyer who skips the owner's policy has no protection for their own equity against historical title defects.
What does title insurance not cover in Pennsylvania?
Title insurance does not cover future liens or encumbrances created after closing, issues the buyer was aware of before purchase, and in some cases issues that a proper survey would have revealed. It covers defects in the historical chain of title — not future events.
How much does title insurance cost in Pennsylvania?
Title insurance premiums in Pennsylvania are state-regulated. The owner's policy premium is based on the purchase price — typically a few hundred to over a thousand dollars depending on the purchase price. The lender's policy is based on the loan amount. Both are one-time premiums paid at closing with no ongoing payments.