Title insurance in Iowa: why you get a guaranty, not a policy

Why is private title insurance not sold in Iowa?

Section 515.48(10) excludes “title insurance or insurance against loss or damage by reason of defective title, encumbrances or otherwise” from the kinds of insurance the Commissioner of Insurance can approve. Iowa Title Guaranty’s program manual traces this to a 1947 amendment and says the Iowa Supreme Court upheld it in Chicago Title Insurance Co. v. Huff (1977). The same manual notes that the Attorney General has said it is not unlawful for a lender to buy out-of-state title insurance, but that such a policy does not take the place of Iowa’s evidence of title.

Iowa’s lending law points the same way. For loans on one- or two-family homes the borrower will occupy, § 535.8 lists the title costs a lender may charge, including attorney’s opinions, abstracting fees and “the cost of a title guaranty issued by the Iowa finance authority.” Title insurance premiums are not on the list, and § 535.8(3) says the section does not change the ban in § 515.48(10).

What does Iowa use instead?

Iowa has long relied on an abstract and attorney’s title opinion. An abstract is a history of the recorded documents that affect the property. An attorney reads it and gives a written opinion on who holds title and what liens exist.

ITG sits on top of that system. By statute, before ITG issues a guaranty it requires an abstract that a participating abstractor has brought up to date, and a title opinion from a participating attorney (§ 16.91(6)). The attorney who writes the opinion can issue the certificate (§ 16.91(7)). So the attorney’s and abstractor’s work is part of the cost of title protection in Iowa. The sources I read do not set what they charge.

A guaranty is not backed by the state. Claims are payable only from ITG’s own title guaranty fund, and “the state is not liable” (§ 16.91(2)).

What does ITG coverage cost?

ITG’s residential rate sheet (effective July 1, 2023) covers one- to four-unit homes, including second homes and rentals.

ITG’s owner-coverage page says the owner certificate is free up to $750,000 when the lender simultaneously obtains ITG coverage. If the lender does not, the owner certificate costs the flat $175. The listed endorsements, such as survey and condominium coverage, carry no additional premium when issued with the original transaction; the Modification endorsement is the one exception ITG names in its manual.

The rate sheet also notes that lender coverage above the conforming loan limit requires a survey or real property inspection report.

Example. On a $213,300 purchase, the premium for either certificate is $175, because the price is below $750,000. With a lender certificate issued at the same time, the owner’s certificate adds no premium. On a $900,000 home, the premium is $175 + ($150,000 ÷ $1,000 × $1) = $325.

What does the owner’s certificate protect against?

ITG describes covered defects such as undisclosed liens, defective legal descriptions, document and execution errors, mistakes in searching the records, fraud and forgery, and paid but unreleased mortgages. The owner’s certificate stays valid as long as your interest is unchanged and ends when you sell. You do not need a new one when you refinance. Read the certificate itself for the exact terms and exceptions.

Since December 2025, ITG also offers title theft coverage, a forgery endorsement for a flat $175, for new buyers or existing owners of one- to four-family homes. It covers legal defense if someone impersonates you and fraudulently transfers or mortgages the property.

How do I ask for it?

Tell your lender and your real estate agent that you want an ITG owner certificate. If your lender is buying lender coverage, ask that owner coverage be added to the commitment. For a cash purchase, or if your lender does not get ITG coverage, complete ITG’s application for title guaranty. A closing protection letter protects against loss from a participating closer’s mishandling of settlement funds or failure to follow closing instructions, and must be requested before closing. See how title insurance works nationally, closing costs in Iowa and why Iowa buyers use an attorney.