Title Insurance & Natural Hazard Disclosures
Understand title insurance, natural hazard disclosures, and the reports Bay Area buyers receive during escrow.
What Is Title Insurance?
Last updated: August 2026
Title insurance protects against financial loss from defects in a property's title — issues that existed before you purchased the home, such as liens, ownership disputes, recording errors, or undisclosed encumbrances. Unlike other types of insurance that cover future events, title insurance covers past events.
In California, buyers also receive a natural hazard disclosure report, which identifies whether the property is located in designated hazard zones such as earthquake fault zones, flood zones, wildfire hazard areas, or landslide-prone areas. This is a critical part of the disclosure process in the Bay Area.
Important: Title insurance policies, natural hazard disclosure requirements, and report contents can vary. This guide provides general information. Always review your title report and disclosure documents carefully, and ask your Realtor or title company about anything you don't understand.
Key Things Buyers Should Know
Lender's Title Policy
Protects the lender's interest in the property. Typically required when financing and usually paid by the buyer in Northern California.
Owner's Title Policy
Protects your ownership interest against title defects that predate your purchase. Optional but recommended. One-time premium at closing.
Natural Hazard Disclosure
California requires sellers to disclose if a property is in an earthquake, flood, wildfire, or landslide hazard zone. Buyers receive this report during escrow.
Preliminary Title Report
Issued early in escrow, this report shows the current condition of the title — liens, easements, encumbrances, and restrictions — so you can review before closing.
Natural Hazard Disclosures in the Bay Area
The Bay Area has unique geological and environmental considerations. California law requires sellers to disclose whether a property is located in designated natural hazard zones. Here's what buyers should understand:
Earthquake Fault Zones
Discloses whether the property is near an active earthquake fault zone as mapped by the state.
Flood Zones
Identifies whether the property is in a FEMA-designated flood zone, which may affect insurance requirements.
Wildfire Hazard Zones
Discloses whether the property is in a state-designated very high fire hazard severity zone.
Landslide & Liquefaction
Identifies areas prone to landslides or soil liquefaction, which can affect structural risk.
Frequently Asked Questions About Title Insurance
What is title insurance?
Title insurance protects against financial loss from defects in the title to a property — such as liens, encumbrances, ownership disputes, or recording errors that existed before you purchased the home. Unlike other insurance, it covers past events rather than future ones.
What is the difference between lender's and owner's title insurance?
Lender's title insurance protects the lender's interest in the property and is typically required when you finance a home. Owner's title insurance protects your ownership interest and is optional but recommended. In Northern California, the buyer typically pays for the lender's policy.
What is a natural hazard disclosure report?
A natural hazard disclosure report identifies whether a property is located in designated hazard zones — such as earthquake fault zones, flood zones, wildfire hazard zones, or landslide areas. In California, sellers are required to provide this disclosure to buyers.
What is a preliminary title report?
A preliminary title report (or 'prelim') is a document prepared by the title company that shows the current state of the property's title, including any liens, encumbrances, easements, or restrictions. It's issued early in escrow so the buyer can review the title condition before closing.
Do I need owner's title insurance if I'm buying a new home?
Even with a new home, the land it sits on has a history. Owner's title insurance protects you against claims that predate your purchase — such as undisclosed liens, boundary disputes, or recording errors. It's a one-time premium paid at closing that provides coverage for as long as you own the property.
What should I look for in a preliminary title report?
Review the report for liens, easements, encumbrances, CC&Rs (conditions, covenants, and restrictions), and any other items that could affect your use of the property. I help my buyers review preliminary title reports and flag anything that needs attention before closing.
Questions About Title or Disclosures?
I help buyers review title reports, natural hazard disclosures, and all transaction documents so you understand what you're signing.
Buying a Home in the Bay Area?
I'll help you understand every document in your transaction — from title reports to hazard disclosures — so you can buy with confidence.