Quick Answer
A title commitment becomes a title policy after the transaction closes, documents are recorded, and all underwriting conditions are met. The commitment is the title insurer's conditional promise to issue a policy. The policy is the actual contract of insurance issued after the conditions are satisfied.
Many people assume that when they receive a title commitment, they have title insurance. That is not correct. Understanding the distinction between the commitment and the policy is important for knowing when your coverage actually begins.
What Is the Commitment
The title commitment is a promise. It says, in effect: if these requirements are satisfied and subject to these exceptions, we will issue a title insurance policy. It is a preliminary document that shows what the policy will look like once the transaction closes. Read What Is a Title Commitment? for a complete explanation.
What Must Happen Before Policy Issuance
Before the policy can be issued, several things must happen:
- The transaction must close (documents signed, funds exchanged)
- The deed must be recorded with the county
- The mortgage or deed of trust must be recorded (if financed)
- All outstanding requirements on the commitment must be satisfied
- The title company's underwriting conditions must be met
- The bring-down search must show no new adverse matters
For the full sequence, read What Happens After Title Requirements Are Cleared?
What Is the Final Policy
The final title insurance policy is the actual contract of insurance. It contains the terms, conditions, and exclusions that govern coverage. The policy is typically issued after closing and recording, and it is mailed or delivered to the insured and the lender.
Does the Policy Look Exactly Like the Commitment
Generally, yes. The policy should reflect the same proposed insured, policy amount, legal description, and exceptions as the commitment, assuming all requirements were satisfied and nothing changed during the closing process. However, the policy is the final, binding document.
When Will I Receive It
Policy issuance timing varies. In many cases, the policy is issued within a few weeks after closing. The owner's policy is sent to the buyer, and the lender's policy is sent to the lender. If you have not received your policy within a reasonable time, ask your title company for an update.
Why Should I Keep It
Your title insurance policy is an important document that proves your coverage. Keep it with your other important real estate documents. If you ever need to file a claim, you will need the policy. For more on what the policy covers, read about what an owner's title insurance policy covers and what a lender's title insurance policy covers.
The Bottom Line
Key Takeaway
The commitment is a conditional promise. The policy is the actual insurance contract. Coverage does not begin until the policy is issued after closing and recording. Review the final policy to confirm it matches what the commitment promised.
FAQs
What if the final policy does not match the commitment?
Contact your title company immediately. Discrepancies between the commitment and the final policy should be resolved. The policy should reflect the coverage you expected based on the commitment.
Is my property insured during the gap between closing and policy issuance?
Generally, coverage relates back to the date of recording, but the policy is issued afterward. If a covered defect arises during the gap period, you should be covered, but confirmation should come from your specific policy terms and your title company.