Title Insurance for New Construction: What Buyers of New Builds Actually Pay For

Buying a brand-new home in Northern Virginia, Maryland, or Washington DC feels like a clean slate. No prior owners, no hidden history, no surprises lurking in the chain of title. But even brand-new construction carries title risks — and understanding how title insurance works for new builds is the difference between a smooth closing and an expensive headache down the road.

Here is what new construction buyers need to know about title insurance, what it costs, and how to potentially save money through reissue rates and policy options.

Why New Construction Still Needs Title Insurance

It seems counterintuitive. The home was just built. How could there be title issues? But title insurance protects against more than past ownership problems. A new construction title search can surface:

• Boundary disputes. The lot may have been carved from a larger parcel, and that subdivision process can carry easements, setbacks, or deed restrictions that affect your use of the property.
• zoning and permit violations. If the builder obtained permits but deviated from approved plans, those issues can become your problem after closing.
• Mechanic's liens. General contractors and subcontractors have lien rights in Virginia, Maryland, and DC. If a builder fails to pay subs, those lien rights can attach to your property — even though you never hired them.
• Tax and assessment issues. The land may carry unpaid property taxes, special assessments, or tax liens from prior ownership that transfer with the deed.
• Right-of-way and easements. Utility companies, neighboring property owners, or municipalities may hold easements that cross your new lot — for water lines, sewer, access, or drainage.

A clean title search catches these issues before closing. Title insurance protects you against the ones the search misses.

Types of Title Insurance for New Construction

There are two policies every new construction buyer should understand:

Lender's Title Insurance

If you are financing your new build with a construction loan or end loan, your lender will require a lender's title policy. This policy protects the lender's investment up to the loan amount. It does not protect you.

Owner's Title Insurance

This is the coverage that protects your equity. For new construction, buyers have two main options:

• Standard owner's policy. Protects against title defects not discovered in the search.
• Enhanced owner's policy. Adds broader coverage including building permit violations, certain easements, and post-policy forgery protection. In many cases, the enhanced policy costs only a modest amount more and provides substantially better protection.

For new builds in particular, the enhanced policy is often worth the additional premium. The risks — permit issues, contractor liens, zoning deviations — are exactly the gaps the enhanced policy covers.

What New Construction Title Insurance Costs in the DMV

Title insurance premiums in Virginia, Maryland, and DC are filed with the state, which means the base rate is regulated. However, your actual cost depends on several factors:

• Purchase price. Title insurance premiums are calculated as a percentage of the purchase price, with graduated rate tiers.
• Loan amount. For the lender's policy, the premium scales with the loan amount.
• Reissue rate. If the builder or developer previously owned the land and had title insurance, you may qualify for a reissue rate — typically a 10-40% discount on the owner's policy premium. This is one of the most commonly missed savings in new construction transactions.
• Enhanced vs. standard. The enhanced owner's policy adds roughly $100-$300 to the standard premium in most DMV transactions.

In Northern Virginia or Maryland, a typical new construction home in the $500,000-$700,000 range will see owner's title insurance premiums in the $1,500-$2,500 range, depending on whether you choose the enhanced coverage and whether you qualify for a reissue rate.

The Reissue Rate: The Biggest Savings Opportunity

This is the single most underutilized discount in new construction title insurance. Here's how it works:

If the developer or builder purchased title insurance when they acquired the land or started development — which most national and regional builders do — you, as a subsequent buyer, may be entitled to a reissue rate (sometimes called a "reissue credit" or "prior policy" discount).

The discount varies by state and carrier but typically ranges from 10% to 40% off the owner's title insurance premium. The key is asking for it. Your title company should proactively check whether a prior policy exists and apply any available reissue rate.

Not all title companies do this automatically. At Pruitt Title, we pull the prior policy (if one exists) and calculate the reissue rate for every new construction transaction. It is one of the concrete ways we save buyers money on new builds.

Who Pays for Title Insurance in New Construction?

In the DMV, custom varies:

• Virginia. The buyer typically pays for both the owner's and lender's title insurance policies, unless the contract specifies otherwise.
• Maryland. The buyer typically pays the owner's policy premium. The lender's policy is often paid by the seller in a tradition known as "seller pays," though this varies by transaction and market conditions.
• DC. The buyer typically pays for both policies.

Regardless of who pays at closing, the cost is almost always negotiable and should be factored into your closing cost estimates. Always ask for an itemized quote that shows the title insurance premium separately.

What to Ask Your Title Company Before Closing on New Construction

1. Is there a prior title policy? If the builder owned the land with title insurance, ask whether you qualify for a reissue rate.
2. Standard or enhanced? Get quotes for both the standard and enhanced owner's policies. The price difference is often small; the coverage difference is not.
3. What does the enhanced policy cover? Make sure you understand the added protections, particularly around permits, zoning, and mechanic's liens.
4. What did the title search find? Request a copy of the commitment and review any exceptions with your title company and real estate agent.
5. Who handles curative work? If the title search surfaces an issue — a permit problem, an easement, a lien — you want a title company that resolves it before closing, not hands you the problem afterward.

Get a Fast, Itemized Quote for Your New Construction Closing

If you are buying a new build in Northern Virginia, Maryland, or DC, get a free title quote in minutes. We will show the standard and enhanced options side by side, calculate any reissue rate you qualify for, and give you an itemized breakdown before you commit.

We close new construction transactions across the region every week, and we know the specific risks that come with builder-provided homes. If you are working with a builder, also see our guide to title insurance for construction loans and our title company for builders page.