Is title insurance always required?

Title insurance is not required if the buyer is paying for the property without the assistance of a loan (which is really only the case in about 10 percent of all transactions). If the buyer chooses to go without title insurance, it’s up to them to make sure all legal documents are filed properly, and they bear the risk of any legal issues. For this reason, most individuals still choose to purchase title insurance, even when there is no loan.

For loans for less than 20 percent of the property’s value, such as home equity loans, lenders often forgo the title process or request certain non-title insurance products (e.g., lien checks).

Lenders could choose to go without title insurance for balance sheet loans (loans they do not sell to the secondary market). However, most lenders still require title services for these loans due to the risks involved.