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Whenever one buys a property (with a mortgage) lawyers usually include a title insurance policy with the closing documents. Does one need to keep it in a safe place? How long does one need to keep it? Is there a copy available somewhere else in case the original is misplaced over the years?

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Disclaimer: what I say below applies to at least one State in the US but not necessarily to other States which may have different ways of handling the mechanics of real-estate transactions. I am told that in some States, closing a real-estate purchase transaction is a far simpler process than in other States.


When real property is sold, the title to the property passes from the seller to the buyer, and thus it is in the best interest of the buyer to make sure that the seller indeed has legitimate title to the property when the sale is executed. A title insurance policy ensures that in case of a defect in the title which invalidates the sale, the beneficiary of the policy (OP) does not lose all the money invested as well as the entire property. In many jurisdictions in the US, the buyer asks the seller to provide the title insurance policy (typically issued by the title search company that did the legwork). When a bank is issuing a mortgage loan to enable the buyer to acquire the property, the bank is definitely going to demand that someone provide a title insurance policy to shield the bank from defects in the title. In such cases, there are often two title insurance policies, one that protects the bank (usually for the amount of the loan) and another that protects the buyer for the full sale price, with one of the policies essentially being a rider on the other and thus available for a smaller premium than the premium for the main policy. (Title insurance policies are usually single-premium policies).

So, with that as prologue, the answers the OP seeks are

Does one need to keep it in a safe place?

Yes, it protects you even if it is a single policy that pays off only the bank for the amount of the loan and doesn't cover you at all. If a long-lost heir shows up claiming that he is co-owner with his brother the seller, and that his brother had no right to sell the property without his (Robinson Crusoe's) consent, and as a result, the sale to you is invalidated by a court, you have lost the house (and all your down-payment etc as well) but you nonetheless still owe the bank the unpaid principal of the mortgage (note: mortgage means "death-grip" (on the throat)). In such a case, you can pull out the "bank's interest only" policy to pay off the bank and keep it off your back as you try to put your life back together. In the best of all possible worlds the policy covers you as well, and thus while you lose the house, you at least get back your equity and don't have to hassle with the bank.

How long does one need to keep it?

Till the property is sold. If you have a title insurance policy in place when you prepare to sell the property, you might get a break on premium for the title insurance policy that you will need to provide to your buyer (or his bank) especially if it is the same title search company that will be issuing the new policy.

Is there a copy available somewhere else in case the original is misplaced over the years?

Depends. But why not just stick the policy in your safe-deposit box with a copy in your filing cabinet? Your heirs might very well need it when they come to sell their late lamented parent's possessions.

  • Thank you for a detailed answer. Do you know if the new policy is issued when the property is refinanced? If so does the previous become cancelled? – Vitalik Jan 4 '15 at 17:30
  • The answer depends on the refinancing deal. Is it the same bank or a different one? Was another title search required (e.g. to ensure that there are no mechanic's liens or other liens (e.g. tax liens) on the property etc)? – Dilip Sarwate Jan 4 '15 at 19:17
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This answers a more general case than your question:

I suspect other people have copies (I think lawyers need to make and keep copies of pretty much everything). But if all other people lose their copies (fire, faulty process, incompetence, fraud), it's good to still have a copy of any contract-like document you own. In my case I keep all legal documents in a desk drawer and as a digital copy at a different physical location (in case of fire).

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I would keep it until you sell the house in case any issue ever arises.

  • I was attempting to address the first two parts of the question "Does one need to keep it in a safe place" (Yes) and "How long does one need to keep it" (for as long as you own the house). – jmg229 Jan 5 '15 at 20:19

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