What Is Title Insurance?

Title insurance is a special type of insurance that protects you from losing money because of problems with the property’s ownership — what’s called the title. Sometimes, there might be hidden issues like:

• Previous owners who didn’t pay their debts
   
• Confusing paperwork mistakes
   
• Unknown heirs claiming rights to the property
   

If any of these problems pop up after you buy the house, title insurance helps cover the costs to fix them or protect your ownership.

 

How Title Insurance Works in Most States

In many states, private companies sell title insurance. They check the history of the property to make sure the title is clear, then offer policies to protect buyers and lenders.

This way, if something goes wrong, you can feel safe knowing your investment is protected.

 

Iowa’s Unique Title Insurance System

Here’s where Iowa is different:

Iowa does not allow private companies to sell title insurance. Instead, the state has its own public program called Title Guaranty.

This program was created by the Iowa Legislature to help protect people who buy property in Iowa while also supporting local home ownership programs.

Title Guaranty is run by the Iowa Finance Authority, a state agency that manages this system. It pays for itself from fees and any extra money goes to help first-time homebuyers.

 

How Title Guaranty Works

Here’s the process for getting title protection in Iowa:

1. Abstract Preparation: A participating company updates the property’s history report, called an abstract. This report includes all past ownership and important records related to the property.
    
2. Attorney Title Opinion: An attorney reviews the abstract and writes a title opinion (sometimes called a title guarantee commitment). This means the lawyer checks the paperwork to make sure everything is in order.
    
3. Issuing Coverage: Using this abstract and attorney opinion, Title Guaranty issues Commitments, Certificates, and Endorsements that protect buyers and lenders from title problems.
    

 

What Does This Cost?

Iowa’s public title program offers very affordable protection. For example:

• For a home purchase, coverage up to $500,000 costs just $110.
   
• If the home price is more than $500,000, there is a small extra fee of $1 per $1,000 over that amount.
   
• For other transactions like refinancing or getting a second mortgage, the cost is even lower — just $90 for coverage up to $500,000.
   

Many common add-ons, called endorsements, are provided free of charge.

Plus, if you get owner’s coverage together with lender’s coverage, Iowa’s program offers the owner’s protection for free.

 

What Happens After Closing?

After the sale is finished and all mortgage documents are recorded, the property abstract is updated to reflect the new ownership. Then either the abstractor or Title Guaranty will issue the final Certificate showing that the property’s title is guaranteed.

 

Why Is Iowa’s System Important?

Iowa’s public title guarantee program:

• Keeps title insurance affordable for homeowners and lenders
   
• Makes sure every property has a clear and legally sound ownership record
   
• Supports home ownership programs with profits, helping more Iowans buy homes
   

If you’re buying a home in Iowa, it’s good to know that you’re protected by a strong, state-run system designed just for you.

 

Need Help With Title Insurance?

If you want to learn more about how title protection works in your state or need help with your home purchase, reach out to a trusted real estate professional or your local Title Guaranty office.