What is Title Insurance in Massachusetts?
Title insurance is an important cost component within Closing Costs that always intrigues a first time home buyer. Title insurance in Massachusetts 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 Massachusetts title insurance policies: Lender’s Title Insurance Policy and Owner’s Title Insurance Policy.
Lenders in Massachusetts often require borrowers to purchase a Massachusetts Lender’s Title Insurance Policy which guarantees protection for Massachusetts lenders against issues arising out of defects on the title of a Massachusetts property. On the other hand, the Massachusetts Owner's Title Insurance Policy protects the buyer against claims and liens.
Title insurance policy premiums in Massachusetts 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 Massachusetts title insurance calculator.
How much does title insurance cost in Massachusetts?
For a $500,000 property, you are going to pay a total of $2,000 for a simultaneous issue of both owner’s and lender’s policy.
Here are some more use cases based on a simultaneous issue of both lender’s and owner’s policies for standard coverage.
- For a purchase price of a $300,000 property in Massachusetts with a 20% down payment ($60,000), the cost of title insurance policy and lender's policy are $1,095 and $175 respectively.
- For a purchase price of a $300,000 property in Massachusetts bought with full cash, the cost of the title insurance owner's policy is $1,095.
- For a purchase price of a $1,000,000 property in Massachusetts with a 20% down payment ($200,000), the cost of the title insurance owner's policy and lender's policy are $3,605 and $175 respectively.
- For a purchase price of a $1,000,000 property in Massachusetts bought with full cash, the cost of the title insurance owner's policy is $3,605.
- For a purchase price of a $5,000,000 property in Massachusetts with a 20% downpayment ($1,000,000), the cost of the title insurance owner's policy and lender's policy are $13,650 and $175 respectively.
- For a purchase price of a $5,000,000 property in Massachusetts bought with full cash, the cost of the title insurance owner's policy is $13,650.
How is Title Insurance Calculated in Massachusetts?
Massachusetts has multiple pricing slabs based on the type of policy. There’s the ALTA Policy that gives you standard coverage while the Eagle Policy gives you extended coverage and costs more than the ALTA Policy. Here we will consider the prices for the ALTA Policy.
| Property Rate | ALTA Cost of Owner’s Policy (per $1000) |
| $1,000 - $39,000 costs a flat $146 | |
| $40,000 - $1,000,000 | $3.65 |
| $1,001,000 - $8,000,000 | $2.05 |
Simultaneous issue of lender’s policy with the ALTA Owner’s policy will cost you $175 in Massachusetts.
Say you want to calculate the cost of the owner's title policy for a $500,000 property in Davidson County. The total cost will be:
What is the Owner's Title policy in Massachusetts?
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 Massachusetts?
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.
What is not covered in Title Insurance in Massachusetts?
Title insurance may not cover the following:
- Damages due to natural calamities such as thunderstorms.
- Losses due to infestation
- Financial losses due to repair and maintenance of items
- Damage due to a fire
How long is the title policy valid in Massachusetts?
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 in Massachusetts?
The Division of Insurance or DOI is responsible for the title insurance landscape in Massachusetts. However, it is clearly stated by the DOI that they do not approve the policies of the insurance companies, and buyers are advised to read and understand them on their own.
Who pays for Title Insurance in Massachusetts?
Title insurance fees can be paid by either of the parties. However, as a custom, the seller pays for the title insurance in the southern part of the state while the buyers generally pay in the northern counties of the state.
Is Title insurance required in Massachusetts?
Title insurance is not required by law in Massachusetts however it is always best to purchase a title policy before a deal is signed between the buyer and the seller.
Should you shop for title insurance in Massachusetts?
You can definitely shop for title insurance in the state of Massachusetts 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 Massachusetts?
Technically there is no discount on title insurance in Massachusetts. 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 $175 for the Lender’s Policy.