When is title insurance typically purchased?

Title insurance is typically purchased at the closing of a real estate transaction. This timing is significant because it aligns with the moment when ownership of the property is transferred from the seller to the buyer. During closing, various documents are signed, and financial transactions are completed, which establishes the new owner's rights to the property.

Title insurance serves to protect the buyer (and often the lender, if applicable) from potential issues related to the title that may arise after the purchase. These issues could include unknown liens, disputes over property boundaries, or claims of ownership from other parties. Since these concerns are directly tied to the ownership rights being established at closing, obtaining title insurance at this point ensures that the new owner is adequately protected from any adverse claims that may surface post-transaction.

In contrast, purchasing title insurance before the property is listed for sale would not align with the protection needs of potential buyers, as they wouldn't yet have any claim to that property. Similarly, buying it after moving in or whenever the owner sees fit would increase the risk of encountering title issues without any coverage. Therefore, the most logical and effective time for purchasing title insurance is during the closing process of the real estate transaction.