Buying a home in Lancaster and hearing about title insurance for the first time? You are not alone. Between the contract, inspections, and financing, it can feel like one more item on a long list. The good news is that a little understanding goes a long way. In this guide, you’ll learn what title insurance covers, how Pennsylvania sets pricing, Lancaster County watch-outs, and what to expect at closing so you can move forward with confidence. Let’s dive in.
Title insurance basics
Title insurance protects you from financial loss if a hidden problem with the property’s title comes to light after you buy. It covers issues that existed before your policy date but were not found during the title search. You pay a one-time premium at closing, not an annual fee.
Two policies you will encounter
- Lender’s policy: Required by your mortgage lender. It protects the lender’s interest and lasts until the loan is paid off.
- Owner’s policy: Optional but recommended. It protects your equity and remains in force as long as you or your heirs hold an interest in the property, subject to policy terms.
What title insurance covers
Title insurance typically addresses problems like errors in public records, unknown liens, forged documents, improper signatures, and undisclosed or missing heirs. It may also protect against fraud or forgery affecting title. If a covered issue arises, the policy can cover legal defense and loss up to the policy amount.
What it usually excludes
Standard policies do not cover zoning or building code compliance, environmental conditions, or boundary disputes without specific endorsements. They also do not cover issues created after the policy date or matters listed as exceptions in the policy. Unrecorded rights may be excluded unless you add endorsements.
Endorsements explained
Endorsements are add-ons that extend coverage to specific risks, such as survey matters, access, mechanics’ liens, or certain tax issues. They add cost, and whether you need them depends on the property and your lender’s requirements. Ask the title company which endorsements apply and why.
Pennsylvania pricing and process
Title insurance in Pennsylvania is regulated by the Pennsylvania Insurance Department. Premiums follow state or underwriter rate filings, so base rates for a given purchase price are often similar across local title companies. Service fees, endorsements, and settlement charges can vary by provider.
How premiums are set
- Premiums are a one-time charge set by the purchase price for owner’s policies and by the loan amount for lender’s policies.
- Expect separate line items for endorsements, settlement or closing fees, recording fees, and lien payoffs if needed.
- For exact premium figures, request a written quote from a licensed Lancaster title company or ask for guidance on the rate schedule.
Who pays which policy
Custom varies by transaction and local practice. The buyer typically pays for the lender’s policy because the lender requires it. Payment for the owner’s policy is negotiable and should be spelled out in your purchase agreement. Ask your agent to confirm how your contract handles it.
What is in the title commitment
Before closing, you will receive a title commitment. Schedule A lists the basics of the policy. Schedule B lists the exceptions and the steps needed to clear title before closing. Read Schedule B closely. It tells you which issues must be addressed now and which items will remain as exceptions in your final policy.
From search to final policy
The title company searches public records for ownership history, liens, easements, judgments, and recorded restrictions. If they find problems, they work with the parties to cure them or show them as exceptions in the policy. After closing and recording, you receive your final policies and copies of the recorded documents. Keep these in a safe place.
Lancaster County watch-outs
Buying in Lancaster County brings a few local nuances. Knowing them helps you ask the right questions and avoid surprises at closing.
Local records and offices
Your title examiner will pull records from the Lancaster County Recorder of Deeds and county property systems. The Tax Claim Bureau and your local municipality track property tax status and municipal liens. Confirm that current year taxes and any local liens are identified and addressed before you sign.
Property types and common issues
- Older homes and historic areas: Long chains of title can reveal probate gaps or missing signatures. Historic district rules or recorded covenants may limit exterior changes and can appear as exceptions in your policy.
- Rural and agricultural tracts: Lancaster County’s farmland preservation and conservation easements are common. Recorded easements or rights-of-way can affect how you use the land. Ask about subdivision or lot restrictions if you plan improvements.
- Subdivisions and HOAs: Covenants, conditions, and restrictions are usually recorded and will appear in the commitment. Review them early so you know the rules you are buying into.
- Access and private roads: Shared driveways and private roads appear in many semi-rural locations. An access endorsement may be worth discussing if your property depends on an easement for ingress and egress.
Typical timelines
A title search and commitment may take several days to a few weeks. Older properties or complex histories can take longer. If issues are found, clearing them can extend the closing timeline until payoffs, releases, or affidavits are complete.
Your closing steps in Lancaster
- Sign a purchase contract. It may state who selects the title company and who pays which policy.
- Title search begins. You and your agent review the title commitment, especially Schedule B exceptions.
- Clear title issues. The seller usually handles payoffs and releases. Confirm in writing what will be removed and what will remain as exceptions.
- Prepare to close. Your lender needs the title commitment and will require the lender’s policy before funding.
- Close and record. You pay the premiums and closing costs, documents are recorded, and final policies are issued.
- Post-closing. Store your owner’s policy and recorded deed securely.
Buyer checklist before and at closing
- Copy of the title commitment, including Schedule A and Schedule B, with a plain-English explanation of major exceptions
- Written quote of premiums and an itemized list of all closing and settlement fees
- List of recommended endorsements and the cost for each
- Estimated timeline to clear any exceptions and who is responsible for each item
- Proof that the title company is licensed or appointed with its underwriting company
- Sample policy forms for both the owner’s and lender’s policy
- Confirmation of when and how you will receive your final policy and recorded documents
Choosing a Lancaster title company
Your choice can influence turnaround time, clarity of communication, and how smoothly title issues are resolved. Compare at least two local providers and ask for itemized estimates.
Verify credentials
Confirm the company is licensed in Pennsylvania and ask which underwriter backs your policy. If an attorney is involved, you can also verify their standing with the Pennsylvania Bar.
Gauge local experience
Ask about experience with Lancaster County records, historic property issues, farmland easements, and municipal liens in Lancaster City and surrounding townships. Request references for recent Lancaster closings similar to your property type.
Compare fees and service
Even when premiums follow state filings, settlement and escrow fees can vary. Request an itemized estimate early. Ask how funds are held, how payoffs are handled, and how quickly you will get your recorded documents and policy.
Questions to ask
- Who conducts the title search and issues the commitment?
- Which underwriter will issue the policy, and can I review sample policy forms and standard exceptions?
- What endorsements do you recommend for this property and why?
- How long will the search and commitment take, and how will you communicate exceptions?
- Can you provide an itemized estimate of all premiums and fees before closing?
- How and when will I receive my owner’s policy after closing?
Common red flags
- Vague or missing explanations for Schedule B exceptions
- Unclear invoices, added fees at signing, or slow responses to payoff and refund questions
- Delays in providing a Closing Disclosure or itemized charges
If any of these appear, request clarity in writing. You can also ask your agent to help compare options.
Should you buy an owner’s policy?
The decision comes down to risk tolerance and peace of mind. Consider the one-time premium against the cost and stress of handling a title dispute on your own. For most buyers, an owner’s policy is a sensible way to protect equity and cover defense costs if a covered issue surfaces later. If you have concerns about specific exceptions, speak with a Pennsylvania real estate attorney or an experienced local title examiner.
Final thoughts
When you understand how title insurance works in Pennsylvania and the nuances of Lancaster County properties, you can head to closing with confidence. Focus on the commitment’s exceptions, verify who pays what in your contract, and pick a title company that communicates clearly and knows Lancaster records inside and out. If you want local guidance from contract to closing, connect with Steve Hammond for a clear plan and a smooth path to the finish line.
FAQs
Is title insurance required for Lancaster homebuyers?
- Lenders require a lender’s policy; the owner’s policy is optional but typically recommended to protect your equity.
How are title insurance costs set in Pennsylvania?
- Premiums are a one-time charge based on purchase price or loan amount and follow state or underwriter filings, with service fees and endorsements varying by company.
Who usually pays for the owner’s policy in Lancaster?
- It depends on your purchase agreement and local custom; the lender’s policy is usually paid by the buyer, while the owner’s policy can be negotiated.
How long does the title search take in Lancaster County?
- From a few days to several weeks, depending on the property’s history and whether issues like old liens or probate gaps need extra work.
What happens if a hidden title defect appears after closing?
- If it relates to a pre-policy issue that is covered and not excepted, the owner’s policy can cover legal defense and loss up to the policy amount; consult your insurer and an attorney for next steps.
