Title insurance policies protect both you and the lender against legal disputes and liens regarding property ownership. If you’re financing your home purchase, you don’t really have a choice: Most mortgage lenders require homebuyers to obtain a lender’s title insurance policy. (It protects them, but you buy it: paradoxical but true.)
Obviously, if you’re buying a home with all cash (or financing in some way other than a mortgage), you won’t need to buy lender’s title insurance.
As for the owner’s title insurance: You should probably get it. While the expense may not initially appear justified, remember, it’s a one-time charge, whose protections are good for as long as you own the home. If you don’t purchase owner’s title insurance and an issue turns up in the future, you’ll likely be responsible for correcting it, which can be costly (the lender’s policy only protects the lender). For example, if the previous owner had unpaid property taxes, the municipality might place a lien on the property, which can’t be removed until the back taxes are paid.
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