Buying a home in Richmond comes with a lot of line items at closing, and title insurance is one of the big ones that raises questions. You want to protect your investment, avoid surprises, and keep costs in check. This guide walks you through what title insurance is, how it works in Virginia, what it costs in the Richmond area, who usually pays, and how to choose a settlement provider with confidence. Let’s dive in.
What title insurance covers
Title insurance protects you against financial loss from defects in a property’s ownership history that existed before you bought the home. These issues can be hard to spot, even with a careful records search. Common covered risks include:
- Forged or improperly executed deeds
- Unknown liens, such as mechanic’s or judgment liens
- Errors in public records
- Undisclosed heirs or probate-related claims
- Certain types of fraud or forgery
Before closing, the settlement agent completes a title search and issues a title commitment. If they find issues, they work to clear them or list them as exceptions in the policy. Claims are not frequent, but when they happen, they can be expensive. Title insurance provides a defense and, if covered, funds to resolve the problem up to policy limits.
Two policies explained
You will hear about two different policies at closing. They protect different interests and are priced differently.
Owner’s policy
- Protects your equity in the home up to the purchase price.
- Remains in force as long as you hold an interest in the property, often including your heirs.
- Optional by law, but widely recommended because it protects your ownership.
Lender’s policy
- Protects the mortgage lender up to the loan amount.
- Required by most lenders if you have a mortgage.
- Covers the lender, not you, so it is not a substitute for an owner’s policy.
Is title insurance required in Richmond?
- If you finance your purchase, your lender will require a lender’s title policy. You cannot skip it and still get the loan.
- An owner’s policy is not legally required in Virginia. Most buyers choose it because it protects their ownership against issues that may surface after closing.
What it costs in Richmond
Title insurance is paid with a one-time premium at closing. There are no ongoing payments. Premiums vary by insurer and are tied to the purchase price (owner’s policy) or loan amount (lender’s policy). In the Richmond area, planning ranges often look like this:
- Owner’s policy for a $250,000 home: commonly in the hundreds up to about $1,000–$1,500, depending on endorsements and company rates.
- Owner’s policy for a $400,000–$600,000 home: roughly $800 to $2,500.
- Lender’s policy: typically lower than the owner’s policy and based on the loan amount, often a few hundred to a couple thousand dollars.
Why the wide ranges? Rates vary by insurer and endorsements. You may also see discounts when both policies are issued together or when a prior policy allows a reissue rate. Always request a written premium quote that lists owner and lender policy premiums, endorsements, and any available discounts.
Factors that affect your price
- Purchase price and loan amount
- Type and number of endorsements you choose
- Whether both owner and lender policies are issued at the same time
- Whether a reissue or short-term rate applies from a recent prior policy
- Property complexity, such as long chains of title or unique easements
Who pays at closing in Richmond
In much of Virginia, including the Richmond area, it is common for the seller to pay for the owner’s policy. This is a local custom, not a rule, and it can vary by neighborhood, market conditions, and your contract. The lender’s policy is typically paid by the borrower. You can negotiate these items, so make sure your purchase contract spells out who pays which premium and review your settlement statement before closing to confirm.
How closings work here
In Virginia, both licensed title companies and real estate attorneys act as settlement agents. In many Richmond transactions, a title company handles escrow, title searches, the commitment, and policy issuance. Some buyers prefer an attorney-led closing, especially for unique or complex situations.
Here is the usual sequence:
- Title search and commitment. The settlement agent searches land and public records and issues a commitment outlining requirements and exceptions.
- Clearing issues. If liens or other defects appear, the settlement agent works to cure them or lists them as exceptions.
- Closing documents. If you are getting a loan, you receive a Loan Estimate and a Closing Disclosure that itemize title premiums and settlement fees.
- Settlement and recording. You sign, funds are disbursed, and documents are recorded with the local clerk.
How to vet a settlement provider
Choosing the right settlement agent can help you avoid delays and surprises. Use this checklist:
- Licensing. Confirm the company or agent is licensed to issue title insurance in Virginia. Ask for their insurer name and license number.
- Local experience. Ask how long they have operated in the specific city or county where you are buying, since local record systems can vary.
- Sample documents. Request a sample title commitment and an example owner’s policy with typical endorsements and exceptions.
- Written premium quote. Get a detailed quote for owner and lender policies, endorsements, and any discounts.
- Endorsements and costs. Ask which endorsements they recommend for your property type and the price for each.
- Insurance and claims. Ask about errors and omissions insurance and how they handle claims.
- Escrow and logistics. Clarify who holds escrow funds, acceptable ID, in-person vs. remote closing options, and timing.
- References and reviews. Check recent reviews and consider asking for references from local professionals.
Smart ways to save
- Ask about a simultaneous-issue discount when you buy both owner and lender policies at the same time.
- Check for a reissue or short-term rate if the seller’s policy is recent.
- Compare written quotes from a few licensed providers before you choose.
- Negotiate in your contract who pays the owner’s policy, since customs can shift with market conditions.
- Confirm endorsements. Choose the coverage that fits your property, but avoid paying for endorsements you do not need.
Practical next steps for Richmond buyers
- Early in escrow: Ask for the title commitment as soon as it is available and review the exceptions with your agent or attorney.
- Before you sign the contract: Clarify who will pay for the owner’s policy so there are no surprises later.
- Before closing day: Confirm your settlement agent and request a final Closing Disclosure with the title premiums and settlement fees.
- If you have special concerns: Consider endorsements related to surveys, access, or zoning. For complex issues like probate or boundary disputes, consider working with a Virginia real estate attorney.
Final thoughts and local help
Title insurance is one of the few one-time costs that can protect you long after the closing table. In Richmond, it is common to see the seller pay for the owner’s policy, while the borrower pays for the lender’s policy, but your contract controls. Get written quotes, compare endorsements, and choose a licensed settlement provider with strong local experience.
If you are planning a purchase or sale in the Richmond area and want clear, local guidance from contract to closing, reach out to Hank Cosby. We are here to help you move forward with confidence.
FAQs
Do Richmond homebuyers need title insurance?
- A lender’s policy is required by most lenders if you finance the purchase. An owner’s policy is optional but widely recommended to protect your ownership.
What does an owner’s title policy actually cover?
- It covers certain pre-existing title defects such as forgery, unknown liens, errors in public records, or undisclosed heirs, subject to policy terms and exceptions.
How much will title insurance cost in Richmond?
- Owner’s premiums often range from the hundreds to a few thousand dollars based on price and endorsements, with lender policies typically lower.
Who usually pays for the owner’s policy in Richmond?
- It is often the seller by local custom, but it is not required by law. Confirm in your purchase contract and review your settlement statement.
Who chooses the settlement agent in Virginia?
- Custom varies. The paying party often has influence, but buyers can request their preferred licensed title company or attorney in the contract.
Can I waive owner’s title insurance in Virginia?
- Yes, but you would take on the risk and potential legal costs if a covered title defect appears later. Many buyers choose the protection.
How long does owner’s title insurance last?
- Coverage is purchased once at closing and typically lasts as long as you hold an ownership interest, often including your heirs.
