What is Title Insurance in Virginia?

Title insurance is an important cost component within Closing Costs that always intrigues a first time home buyer. Title insurance in Virginia protects buyers and lenders from financial liabilities that may arise due to a title defect or a hidden lien. 

Have a look at our Title Insurance explainer video to see how title insurance can protect your lender and your ownership in case of a title defect. 

There are two types of Virginia title insurance policies: Lender’s Title Insurance Policy and Owner’s Title Insurance Policy.

Lenders in Virginia often require borrowers to purchase a Virginia Lender’s Title Insurance Policy which guarantees protection for Virginia lenders against issues arising out of defects on the title of a Virginia property. On the other hand, the Virginia Owner's Title Insurance Policy protects the buyer against claims and liens. 

Title insurance policy premiums in Virginia show up as an itemized list of a closing cost worksheet for a buyer and seller such as a Closing Disclosure, Loan Estimate, HUD-1, or an ALTA Settlement Statement. If you're looking to get a preview of what these costs look like, use this free Virginia title insurance calculator.

How much does Title Insurance cost in Virginia?

Virginia is not one of the most happening states when it comes to volumes of real estate transactions. The average value of homes sold in Virginia is $319,291. 

Overall, a property of $300,000 costs $1,160 for the owner’s policy while a sum of $200 is charged for the lender’s policy that safeguards the lender. 

Here are some more use cases:

  • For a purchase price of a $350,000 property in Virginia with a 20% down payment ($70,000), the cost of title insurance policy and lender's policy are $1,160 and $200 respectively. 
  • For a purchase price of a $350,000 property in Virginia bought with full cash, the cost of the title insurance owner's policy is $1,345. 
  • For a purchase price of a $500,000 property in Virginia with a 20% down payment ($100,000), the cost of the title insurance owner's policy and lender's policy are $1,900 and $200 respectively.
  • For a purchase price of a $500,000 property in Virginia bought with full cash, the cost of the title insurance owner's policy is $1,900. 
  • For a purchase price of a $1,000,000 property in Virginia with a 20% downpayment ($200,000), the cost of the title insurance owner's policy and lender's policy are $3,600 and $200 respectively. 
  • For a purchase price of a $1,000,000 property in Virginia bought with full cash, the cost of the title insurance owner's policy is $3,600. 

How is Title Insurance Calculated in Virginia?

Virginia has 5 pricing slabs for both owner’s and lender’s policy to help you calculate the net amount. These are:

Property Rate Cost of Owner’s Policy (per $1000)
$0 - $250,000 $3.90
$250,000 - $500,000 $3.70
$500,000 - $1,000,000 $3.40
$1,000,000 - $2,500,000 $2.25
$2,500,000 + $2.00

 

Say you want to calculate the cost of the owner's title policy for a $350,000 property. The total cost will be 

    (250000/1000) x $3.90

+  (50000/1000) x $3.70

_____________________

= $1,160

What is the Owner's Title policy in Virginia?

The owner's policy is a legal document that shields the owners from unknown defects such as missing heirs, incorrect documentation, unjust court proceedings, and protects their ownership. The owner’s policy contributes to the majority of the costs that go into purchasing the title insurance. 

What is Lender’s Title policy in Virginia?

The lender’s policy is often purchased along with the owner’s policy. It protects the lender from title defects such as a pending construction lien on the property, errors in the title, and other issues that may arise after the title has been transferred to the buyer. 

Who pays for Title Insurance in Virginia?

The cost of title insurance is negotiable in Virginia but buyers generally expect the seller to pay. It won’t be incorrect to say that it is customary for the seller to pay for both policies. 

What is not covered in Title Insurance in Virginia?

Title insurance may not cover the following:

  • Losses due to infestation
  • Financial losses due to repair and maintenance of items that were not revealed during the property inspection.
  • Damages due to natural calamities such as thunderstorms.
  • Damage due to a fire

How long is the title policy valid in Virginia?

The title policy remains valid till the time you remain the owner of the property. Only when you decide to sell, a new policy must be made in the name of the buyer. 

Who regulates Title Insurance prices in Virginia?

Unlike many states, Virginia does not regulate the title insurance cost. This is why you might find different title companies offering different prices for the same amount of mortgage. It is recommended that you seek help from your realtor or lender to choose the right title company for the most competitive price.  

Who pays for Title Insurance in Virginia?

Title insurance fees can be paid by either of the parties. However, in Virginia, the buyer pays for both policies. 

Is Title insurance required in Virginia?

While title insurance is not legally required in the state of Virginia, as a general rule of thumb, it is always best to go for title insurance irrespective of the fact that it is mandated by the state or not.

Should you shop for title insurance in Virginia?

You can definitely shop for title insurance in the state of Virginia by approaching any reputable title company. However, if you are skeptical, you can ask your agent or lender to help you out with the process.  

Is there any discount on Title Insurance Policy in Virginia?

Technically there is no discount on title insurance in Virginia. But what you can do is go for simultaneous issuing of both Owner’s Policy and Lender’s Policy at the same time. This way you only pay a fixed amount of $200 for the Lender’s Policy.