11/18/2025
11/18/2025
Reasons to Purchase Title Insurance in Massachusetts
Author, Andrew P. Bass, Esq.
Introduction
We are pleased to announce that we are now writing title insurance policies for Fidelity National Financial (FNF) in addition to our long standing relationship with First American Title Insurance Company (FATIC).
This memorandum outlines the key reasons why clients should consider purchasing title insurance when acquiring real property in Massachusetts. Title insurance provides important protections for property owners and lenders that other forms of due diligence may not offer. The following analysis explains the nature of title insurance under Massachusetts law and highlights the benefits of obtaining such coverage.
Legal Standards/Rules
In Massachusetts, title insurance is defined as a policy that provides protection for buyers and lenders "against defects in, or liens or encumbrances on, title." Real Estate Bar Ass'n for Mass. v. National Real Estate Info. Servs., 459 Mass. 512 (2011). It is "an agreement to indemnify the policyholder against loss through defects in title." Stewart Title Guar. Co. v. Kelly, 97 Mass. App. Ct. 325 (2020). Importantly, Massachusetts courts have established that title insurance is "neither an agreement to guarantee the state of title, nor a representation of title," but rather functions as an indemnity contract. Real Estate Bar Ass'n for Mass. v. National Real Estate Info. Servs., 459 Mass. 512 (2011).
Before issuing a policy, title insurers typically search real property records for title defects and exclude any known defects from policy coverage. Stewart Title Guar. Co. v. Kelly, 97 Mass. App. Ct. 325 (2020). The coverage "narrowly covers defects in, or encumbrances on, titles that are in existence when a policy issues." Deutsche Bank Nat'l Ass'n v. First Am. Title Ins. Co., 465 Mass. 741 (2013).
Analysis
1. Protection Against Unknown Title Defects
One of the primary reasons to purchase title insurance is the protection it provides against unknown defects in title. Real Estate Bar Ass'n for Mass. v. National Real Estate Info. Servs., 459 Mass. 512 (2011). Title insurance policies in Massachusetts provide protection "against defects in, or liens or encumbrances on, title." Real Estate Bar Ass'n for Mass. v. National Real Estate Info. Servs., 459 Mass. 512 (2011). This means that if an undiscovered title problem emerges after the property purchase, the title insurance company will indemnify the policyholder for losses resulting from that defect. Deutsche Bank Nat'l Ass'n v. First Am. Title Ins. Co., 465 Mass. 741 (2013).
2. Financial Indemnification for Losses
Title insurance functions as "an agreement to indemnify the policyholder against loss through defects in title." Stewart Title Guar. Co. v. Kelly, 97 Mass. App. Ct. 325 (2020). This means that if a covered title defect causes financial loss, the insurance company will compensate the policyholder up to the policy limits. Deutsche Bank Nat'l Ass'n v. First Am. Title Ins. Co., 465 Mass. 741 (2013). This financial protection can be crucial if significant title problems arise after purchase.
3. Professional Title Search and Examination
Before issuing a policy, title insurers conduct searches of real property records for title defects. Stewart Title Guar. Co. v. Kelly, 97 Mass. App. Ct. 325 (2020). While the title search itself does not guarantee the absence of all defects, it represents a professional examination of public records that can identify many potential issues before closing. This search process adds a layer of security to the transaction.
4. Protection Against Specific Risks
Title insurance "narrowly covers defects in, or encumbrances on, titles that are in existence when a policy issues." Deutsche Bank Nat'l Ass'n v. First Am. Title Ins. Co., 465 Mass. 741 (2013). These may include undiscovered liens, easements, encroachments, or other title problems that could affect ownership rights or property value. Having insurance against these specific risks provides peace of mind to property owners.
5. Potential for Additional Services
In some cases, title insurance companies may offer additional services beyond the basic policy. If "the title insurance company agrees to conduct a search and to provide the insured with an abstract of title," this may provide additional benefits to the insured. Somerset Sav. Bank v. Chicago Title Ins. Co., 420 Mass. 422 (1995). These services can offer a more comprehensive understanding of the property's title history.
6. One-Time Premium for Long-Term Protection
Unlike most other forms of insurance that require ongoing premium payments, title insurance typically involves a one-time premium paid at closing that provides coverage for as long as the insured or their heirs maintain an interest in the property. This makes it a cost-effective long-term protection.
7. Lender Requirements
Most mortgage lenders in Massachusetts require borrowers to purchase lender's title insurance to protect the lender's interest in the property. While this policy protects only the lender, it demonstrates the value that financial institutions place on title insurance protection.
Conclusion
Title insurance provides valuable protection for property owners in Massachusetts by indemnifying against losses caused by defects in title. While it does not guarantee perfect title, it offers financial protection against unknown title problems that may emerge after purchase. Given the significant investment involved in real estate transactions and the potential risks associated with title defects, purchasing title insurance represents a prudent decision for property buyers in Massachusetts.
