There are two kinds of title insurance: lender's and owner's. A lender's policy is required for a mortgage. Many buyers don't realize the lender's policy only protects the lender.
"A lender's policy is not going to help the person who owns the house at all," says Ronald Mann, law professor at Columbia University in New York.
Don't have owner's title insurance? You still can buy an owner's policy after closing. Many foreclosure buyers make substantial additions or improvements to the property. In such cases, update the coverage to protect your full investment, not just the purchase price of the home.
When purchasing owner's title insurance, contact the company that issued your lender's policy, Pfotenhauer says. The rate they give you often will be similar to a "refi rate," he says.
Title insurance covers you from the day you purchased the policy back through the home's entire history. So, your coverage will be as complete as if you'd purchased it at closing, Pfotenhauer says.