A clean title is one of the most important parts of your home purchase, yet it is also one of the least understood. If you have heard stories about surprise liens or ownership claims appearing after closing, you know why this matters. Title insurance is designed to protect you from many of those risks. In this guide, you will learn what title insurance covers in Indianapolis, how owner and lender policies differ, what to expect in Marion County at closing, and how to shop smart. Let’s dive in.
Title insurance basics
Title insurance is a one-time premium product that protects against covered problems with a property’s title that existed before your policy date. Examples include undisclosed liens, forged signatures, or errors in public records. If a covered issue appears after closing, the insurer typically provides legal defense and pays covered losses up to the policy limit.
Owner vs lender policies
- Owner’s policy protects your ownership interest, usually up to the purchase price. Coverage lasts as long as you or your heirs have an interest in the property.
- Lender’s policy protects your lender’s security interest for the life of the loan, usually up to the loan amount. It does not protect your equity.
- If you want protection for your ownership, you need an owner’s policy. A lender’s policy alone is not a substitute.
Standard owner coverage
A standard owner’s policy typically covers:
- Hidden defects in the chain of title, such as forgery, fraud, or improper signatures.
- Undisclosed or outstanding liens that predate closing, like old mortgages, tax liens, or judgment liens.
- Errors in public records, including recording mistakes or misindexed documents.
- Unknown heirs who later claim an interest in the property.
- Legal defense costs to clear covered defects, up to the policy limit.
Policy language varies by insurer, but many use the widely accepted ALTA Owner’s Policy form.
Exclusions to know
Title insurance does not cover everything. Common exclusions and standard exceptions include:
- Zoning, building code, and land-use issues.
- Items a survey or physical inspection would reveal, such as boundary disputes or encroachments, unless you purchase an endorsement that adds this coverage.
- Governmental actions like eminent domain and most environmental contamination.
- Taxes or assessments not yet due or recorded.
Your preliminary title report lists exceptions that the policy will not insure unless resolved or endorsed.
Helpful endorsements
Endorsements are optional add-ons that extend coverage in specific ways. Availability can vary by insurer and state. Common choices include:
- Survey or ALTA survey endorsement for certain boundary, encroachment, or setback issues when a survey is provided.
- Access endorsement to confirm legal access to the property.
- Restrictive covenant endorsements when recorded covenants are in place.
- Mechanic’s lien endorsement for certain construction-related lien risks.
Ask which endorsements your lender requires and which ones could benefit you as the owner.
Marion County title process
In Marion County, local title companies or attorneys search public records and issue a preliminary title report, sometimes called a title commitment. This search reviews recorded deeds, mortgages, liens, judgments, easements, and tax records. The report shows what must be cleared for you to receive marketable title.
Recorded documents that affect title are housed with the Marion County Recorder’s Office. Title companies rely on these records to verify the chain of title and find outstanding encumbrances. You can request copies through a title company if you want to review them.
Local issues to watch
Older urban parcels in Indianapolis sometimes have complex chains of title or unreleased prior mortgages. Homes that changed hands through inheritance may require extra checks for missing heirs or unresolved probate matters. You may also see municipal assessments or unpaid utility or sidewalk charges that must be satisfied. Recorded easements or alley access are common and should be reviewed for how they affect use.
Your path to closing in Indianapolis
Timeline and key steps
- Title search and preliminary report identify recorded liens, easements, and covenants.
- Clearing issues happens before closing. Payoffs and releases for old mortgages, tax liens, or judgments are coordinated by the title company.
- Title commitment lists requirements that must be met before your final policy is issued.
- Closing day arrives. You sign documents, funds are disbursed, and the deed and mortgage are recorded. Final policies are issued after recording.
What to expect at the table
You will receive a settlement statement or a Closing Disclosure if you are using a loan. It will show title insurance charges and who pays which fees. The title company typically handles recording the deed and mortgage, collects payoffs for existing liens, and finalizes recording fees and transfer documents.
Cost and who pays in Marion County
Title insurance is a one-time premium paid at closing. The amount depends on the purchase price and the insurer’s rate schedule. An owner’s policy and a lender’s policy are separate products and appear as separate line items.
Who pays for the owner’s policy is negotiable. In Indianapolis and Marion County, the practice can vary by transaction. Your purchase agreement should clearly state who pays. Endorsements, recording fees, settlement or escrow fees, and payoff processing fees may also apply.
How to shop for title insurance
- Compare premiums, but also compare which endorsements are included or available.
- Ask about the title company’s experience with common Indianapolis issues like older chains of title, alley easements, and municipal assessments.
- Review the title commitment early so you can understand the exceptions and requirements.
- Confirm the insurer’s financial strength and claims-paying reputation through independent ratings.
Practical tips for buyers
- Get the preliminary title report as soon as your contract is accepted. Review all exceptions carefully with your agent or closing officer.
- Clarify which endorsements your lender requires and which add meaningful owner protection, such as a survey endorsement if you have boundary concerns.
- If you are buying an older property, budget extra time to clear possible prior liens or probate questions.
- Confirm in writing who pays for the owner’s policy and how it will show on your Closing Disclosure.
Bottom line
An owner’s policy protects your equity while a lender’s policy protects only the lender. In Indianapolis, the title search, commitment, and closing process address most issues before you get the keys. When something slips through, your owner’s policy is there to defend covered claims and reduce financial risk. If you want help reviewing a title commitment, comparing endorsements, or planning your closing timeline, reach out to a local advisor who can walk you through the details.
Ready to move forward with clarity and confidence? Connect with VIP Home Client LLC for a practical, step-by-step plan for your next Indianapolis or Hamilton County purchase or sale.
FAQs
Do I need owner’s title insurance in Indianapolis if my lender already requires a lender’s policy?
- Yes. A lender’s policy protects only the lender’s interest. An owner’s policy protects your equity and ownership rights.
How long does owner’s title insurance last for a Marion County home?
- It lasts as long as you or your heirs hold an interest in the property. The lender’s policy lasts until the loan is paid off.
What title issues are usually excluded in Indianapolis purchases?
- Zoning or code violations, many boundary and encroachment matters without a survey endorsement, eminent domain, and taxes or assessments not yet due are common exclusions.
Who clears old liens or judgments before an Indianapolis closing?
- The title company coordinates payoffs and releases, usually from the seller’s proceeds, before issuing the final policy.
Which endorsements should I consider for a Marion County property?
- Common options include survey, access, restrictive covenant, and mechanic’s lien endorsements. Your needs depend on the property and your lender’s requirements.
How do I know who pays for the owner’s policy in an Indianapolis contract?
- It is negotiable and should be stated in your purchase agreement. Local custom varies by transaction, so confirm early in the process.
