What is title insurance, and should I get title insurance for my home?
Here is a pretty exhaustive article on that question. Long story short, it is an insurance policy against the possibility that the person selling the property to you doesn't legally own it. If there was some mistake or fraud along the way the proper owner could theoretically repossess the property without you getting your money back. If you are financing the property, it is almost a certainty that the lender will require you to buy it whether you want it or not. When we got our mortgage in the state of Washington, in the United States, we had to get title insurance before our lender would loan the money. This ensures that the person selling us the house actually owns the title, clean and clear. If there are any surprises, the insurance covers us (or the lender, really). "Title insurance protects you from losing rights to your property in case of a court decision. Let's look at an example I recently found in local newspapers. One old woman sold her apartment to person A. The deed was attested by a notary public who verified that indeed in was that old woman putting her signature on the deed. Then person A sold the apartment to person B, etc, then after several deals some unfortunate Buyer bought that apartment. The deal looked allright, so he's got a mortgage to pay for the apartment. Later it turned out that the old lady died three months before she ""sold"" the apartment and the notary public was corrupt. Old lady's heirs filed a lawsuit and the deal was void. So the ultimate Buyer lost all rights to the apartment although he purchased it legally. This is the case when title insurance kicks in. You need one if there's a chance for a deal to be deemed void." "If or when you ""own"" your land outright you need to try and get the land patent on it. That is the supreme form of title to it. It goes back to when the land was acquired by the U.S. (from Britian, France, etc.) by treaty. Treaties trump even our Constitution. When you have a land patent.........IT'S YOURS! That link is to my site but this was so relevant that I had to include it. Hope y'all don't mind."
"The general answer to this is ""yes"".  When you're dealing with single-digit millionaires, the answer is that their insurance habits and needs are basically the same as everyone else.  When you get into the double digit and triple digit millionaires, or people worth billions, they have additional options, but those basically boil down to using ""self-insurance"" rather than paying a company for an insurance policy.  The following is based on both what I've read and a fair deal of personal experience working for or with various stripes of millionaire, and even one billionaire. Addressing the types of insurance you mention: This is generally used to provide survivors with a replacement for income you can no longer provide when dead, in addition to paying for costs associated with dying (funeral, hospital/hospice bills, etc).  Even millionaires and billionaires have this, yes, but the higher your net worth, the less value it has.  If you're worth 9 or 10 figures, you probably already have trust funds set up for your family members, so an extra payout from an insurance policy is probably going to represent a small fraction of the wealth you're leaving your survivors, and as has been noted, insurance makes a profit, so the expectation by the insurance company is that they'll make more money on the policy than they'll have to pay out on death.  That being said, the members of the 9+ figure club I've worked for all had multi-million dollar life insurance policies on them, which were paid for or heavily subsidized by the companies they owned or worked for.  I doubt they would have held those policies if they had to pay the full cost, but when it's free or cheap, why not? Absolutely.  As health insurance in America is an untaxed employment benefit, owing to regulations from World War II, all the wealthy folks I've had contact with got outrageously good plans as part of the companies they work for or owned.  Having said that, even their trust fund beneficiaries held health insurance, because this type of insurance (in America, at least) is actually not really insurance, it's more of a pre-payment plan for medical expenses, and as such, it provides broader access to health care than you'd get from simply having enough money to pay for whatever treatments you need.  If you walk into a hospital as a millionaire and state that you'll definitely be able to pay for your open-heart surgery with cash, you'll get a very different response than if you walk in with your insurance card and your ""diamond-level"" coverage.  So, in this case, it's not as much as about the monetary benefits (although this is a type of ""insurance"" that's generally free or heavily discounted to the individual, so that's a factor) as it is about easier access to health care. Although this is required by law, it's one of the common forms of insurance that the very wealthy can, and often do handle differently than the rest of us.  Most (if not all) US states have a provision to allow motorists to self-insure themselves, which amount to putting up a bond to cover claims against them.  Basically, you deposit the minimum amount the state determines is required for auto insurance with the responsible state organization, get a certificate of self-insurance and you're good to go.  All the high wealth individuals I know when this route, for two reasons - first of all, they didn't have to deal with insurance companies (or pay sky-high rates on account of all the speeding tickets they picked up) and secondly, they made their deposit with government bonds they had in their portfolios anyway, and they could still collect the interest on their self-insurance deposits.  Of course, this meant that if they wrecked or dinged up their Maserati or Bentley or whatever, they'd be out of pocket to repair or replace it... but I guess if you can afford one $200,000 car, you can afford to buy a second one if you wreck it, or get by riding one of your other luxury automobiles instead. Since someone else mentioned kidnapping insurance, I'll point out here that what Robert DeNiro did in Casino when he put a couple million dollars into a safety deposit box for his wife to use if he was kidnapped or needed to pay off a government official is essentially the same thing as ""self-insurance"".  Putting money away somewhere for unexpected events in lieu of buying an insurance policy against them. In real life, the very wealthy will often do this with US treasuries, government bonds and other interest-bearing, safe investments. They make a little money, diversify their portfolios and at the same time, self-insure against a potential big loss. This is another insurance area where even the very wealthy are remarkably similar to the rest of us, in that they all generally have it, yes, although the reason is a little different.  For normal folks, the home they own is generally the largest part of their net worth, or at least a very substantial fraction, for those older folks with retirement savings that exceed the value of their homes.  So for us, we have home owners insurance to prevent a catastrophic event from wiping out the lion's share of our net worth. If you're an ultra-wealthy individual who can afford an 8 figure home, that's not really the case (at least with the ones I've dealt with, who made their fortunes in business and are good managing their wealth and diversifying their assets - could be different for sports stars or the entertainment industry), and these people generally own multiple homes anyway, so it's not as big a deal if they lose one. However, no one actually buys a multi-million dollar home by writing a multi-million dollar check.  They get a mortgage, just like the rest of us.  And to get a mortgage, insurance on the property is a requirement.  So yes, even the ultra wealthy generally have insurance on their home(s).  There is an element of not wanting to shell out another 20 million if the place burns down, or someone breaks in and steals your valuables, but the bigger part of the reason is that it's required to get a mortgage in the first place, which is generally done for financial reasons - interest on your mortgage is a tax deduction, and you don't want to sink millions of dollars all at once into buying a property that's not going to appreciate in value, when you can get a mortgage and invest those millions of dollars to make more money instead." You don't have to use an agent (broker, as you call it), but it is strongly advised. In some counties lawyers are required, in some not. Check your local requirements. Similarly the escrow companies that usually deal with recording and disbursing of money. You will probably not be able to get a title insurance without using an escrow service (I'm guessing here, but it makes sense to me). You will not be able to secure financing through a bank or a mortgage broker without an escrow company, and it might be hard without an agent. Agents required by law to know all the details of the process, and they can guide you through what to do and what to look into. They have experience reading and understanding the inspection reports, they know what to demand from the seller (disclosures, information, etc), they know how and from where to get the HOA docs and disclosures, and can help you negotiate the price knowing the market information (comparable sales, comparable listings, list vs sales statistics, etc). It is hard to do all that alone, but if you do - you should definitely get a discount over the market price of the property of about 5% (the agents' fees are up to 5% mostly). I bought several properties in California and in other states, and I wouldn't do it without an agent on my side. But if you trust the other side entirely and willing to take the risk of missing a step and having problems later with title, mortgage, insurance or resale, then you can definitely save some money and do it without an agent, and there are people doing that. "While a lot of the answers focus on cost to replace and how much money you should have for tangible goods. There are a few more issues to consider.  However before we get started, these issues are not related to ones net worth. They are related to other factors. Having money certainly helps, but someone worth only $10 may not need to insure their stuff under some circumstances. Insurance is a risk avoidance strategy.  As such, it should be used to avoid risks that would otherwise cause issues for you. The normal example is a house. If you lost your house due to fire, would you be able to ""make it"" while you paid the mortgage off, and got a new mortgage to pay for a new house? This is a relatively simple view, but a good one.  These days people tend to look at insurance as a savings account. I payed in X so I am entitled to Y. Heath insurance (a bit more on this later) is exacerbating the issue by selling it's self that way, but it simply isn't true. What your paying the premium for to avoid the risk of loss. Not so you can have a pool of money to draw from in time of need, but so that a time of need should never arise. Which brings us back to, should you get insurance?  Tangible Assets Let's assume you have no legal or contractual obligation to have insurance. If you put the money you were spending aside would you have enough money to secure a new asset should your current one just vanish? This is the normal argument. But it has a second side. Do you need the asset at all, or can you just accept the loss. Lets pick on a red neck for a second. While certainly not millionaires, or ""well off"" by conventional means, the guy with 6 cars on bricks in his lawn does not need to insure 6 cars. If one were to vanish, it may make a hardship but hey, he's got 5 more. So with tangible goods it's more of a question of can you afford to replace the item, do you need to replace the item, and how big a risk is it to you to loose the item? What would you rather loose, the item, or the cost of the insurance? Non-tangible Assets I am going to try to keep this as un-rant like as I can manage, but be aware that I am biased. There are two big examples of non-tangible assets that are commonly insured. Life Insurance, and Health insurance. There are others, but it's very hard to get people to pay money to insure something that they don't actually have. Ideas can be insured, for example, but in order to insure an idea you have to spell it out, at that point why not just file for the patent etc. etc. Keep in mind that a lot of people and companies will insure against losses due to IP theft or other such intangible things. Largely these follow the same rules as tangible assets. This section is meant to focus on those insurances that do not. Life Insurance Life insurance is a bit odd. Were all going to die, so it seems like a ""good bet"" but what your insuring against with life insurance is an early death. For term life insurance it's a gamble. Will you die before your term runs out. For full life insurance (with no term) it's a different gamble. Will you die before you have paid in what they agreed to pay out. In many cases it's also a gamble that you will miss a payment or two and cancel the policy before you die. If the risk of your death worth the insurance. Usually while young the answer is yes. Do you leave your Family short one earner? Will they make it without the insurance? But as you get older, as life insurance becomes more of a sure thing it also becomes less needed. Your kids move out, there not dependent on you any more. You have retirement accounts setup so your partner need not worry should something happen. What risk exactly are your trying to avoid at this point. You will die. You have planned for that eventuality, it's not a risk anymore, it's a fact.  Heath Insurance Is another beast all together. Historically you insured against some catastrophic event, that you couldn't really plan for. Say a heart attack. Surgery and treatment would run in the tens of thousands, so it would ruin you if you didn't have insurance to cover that. That was the risk that you were avoiding. A big, expensive event, causing financial ruin. However, over time it has shifted into something else. The general concept is still there, insure to avoid a risk. But the ""risk"" has been widened to include all manor of things that are not actually risks.  For example a flu. You would go to your doctor, pay your co-pay, and your insurance would pay the rest of the visit. Then you would go to the drug store and get the drugs, pay your co-pay and the insurance pays the rest. But what risk, in this instance are you insuring against? That you can't cover the cost of a doctors visit? That you can't cover the cost of the medication? In this example, a common one, historically the ""mother of the house"" would go you have a flu, have some chicken noodle soup and go to bed. That would be the end of it. Cost of care is a day's lost wages (or maybe a weeks) and a few cans of soup.  However today, because we choose to, the cost of care is much higher. We go to the doctor, pay our co-pays, the insurance has to pay it's part. The doctors office has to carry the cost of the staff it takes to see you, and the staff it takes to handle the claims with the insurance company. And now your flu, cost $1,500. But again that's not exactly true either. With heath insurance and ""normal"" medical care (like sprained ankles, and colds, etc.) the insurance only really covers the cost of having insurance. In that same flu example, if you went to the doctor as a ""self pay"" (no insurance) you would often time get a much lower, and reasonable rate. Frequently, under the cost of your standard co-pay. This seems like the doctors being ""bad"" but it's not. They don't have to file a claim, they don't have to keep track of it. They get immediate payment, not payment 6 months down the line that they need to share with other businesses. With ""critical"" or ""catastrophic"" care, heath insurance is still a good thing. If you have a big, unforeseen event, then heath insurance is great at helping you avoid that risk.  With chronic (long term) care, your back in the same boat as the flu. Often times you can get better, and cheaper, care as a self pay patent, then as a insured patent. That is not always the case however. So you have to measure your own circumstance, and decide if insurance is right for you. But remember insurance is about risk avoidance, and not about paying less. You will ALWAYS pay more for insurance. It's designed that way. Even if the cost is hidden in many ways. (Taxes, spread out over visits, or prescriptions, etc.)" Regarding the opportunity cost comparison, consider the following two scenarios assuming a three-year lease: Option A: Keep your current car for three years In this scenario, you start with a car that's worth $10,000 and end with a car that's worth $7,000 after three years. Option B: Sell your current car, invest proceeds, lease new car Here, you'll start out with $10,000 and invest it.  You'll start with $10,000 in cash from the sale of your old car, and end with $10,000 plus investment gains. You'll have to estimate the return of your investment based on your investing style.   Option C: Use the $10k from proceeds as down payment for new car In this scenario you'll get a reduction in finance charges on your lease, but you'll be out $10,000 at the end. Overall Cost Comparison To compare the total cost to own your current car versus replacing it with a new leased car, first look up the cost of ownership for your current car for the same term as the lease you're considering.  Edmunds offers this research and calls it True Cost to Own.   Specifically, you'll want to include depreciation, fuel, insurance, maintenance and repairs.  If you still owe money you should also factor the remaining payments.  So the formula is: Cost to keep car = Depreciation + Fuel + Insurance + Maintenance + Repairs On the lease side consider taxes and fees, all lease payments, fuel, and maintenance.  Assume repairs will be covered under warranty.  Assume you will put down no money on the lease and you will finance fees, taxes, title, and license when calculating lease payments.  You also need to consider the cost to pay off your current car's loan if applicable.  Then you should subtract the gains you expect from investing for three years the proceeds from the sale of your car. Assume that repairs will be covered under warranty.  The formula to lease looks like: Lease Cost = Fuel + Insurance + Maintenance + Lease payments - (gains from investing $10k) For option C, where you use the $10k from proceeds as down payment for new lease, it will be: Lease Cost = Fuel + Insurance + Maintenance + Lease payments + $10,000 A somewhat intangible factor to consider is that you'll have to pay for body damage to a leased car at the end of the lease, whereas you are obviously free to leave damage unrepaired on your own vehicle. "A quitclaim deed says, in essence, ""whatever ownership I have in this property I give to you"". Contrast that with a warranty deed, in which the grantor guarantees that he has good title, that he has the right to convey the property, that it is free of all liens and encumbrances, and that he will warrant and defend your title in the event of a breach. Obviously the warranty deed gives you more protection, to the extent that the grantor has the wherewithal to back it up. Regardless, the trend today is to buy title insurance and let the title company deal with those complications." In Australia, you will typically be required to pay for mortgage insurance if you borrow more than 80% of the value of the property.  Basically this means another ~1% on top of the regular interest rate.  So it's in your interests to save until you can at least reach that point. If you can't rent and save at the same time, it suggests your finances may be too stretched for buying now to be a good idea. You only need umbrella policy for large amounts of liability protection (I think they usually start with $1M). So if you don't have and don't expect to have assets at such a high value - why would you need the insurance? Your homeowners/renters/car/travel insurance should be enough, and you still need to have those for umbrella since its on top of the existing coverage, not instead. Many people just don't have enough assets to justify such a high coverage. Answer all of their questions honestly and as accurately as you can, but don't stress too much about it.  If you don't know the answer to something, ask the insurance agent what it means; that's what they're there for.  (If you're doing this online, email the support, or the 'live chat' feature many of them have.  Or, don't do it online, if you feel better having an agent in person; nowadays, most of the major insurers are similar on price so it's not a massive savings to skip the agent.) As far as whether it's important to pick a specific insurer - that's really your call.  Read reviews, understanding that folks with bad experiences are more likely to write reviews than the 90% of folks who get no benefit from homeowner's insurance. You need to make the decision as to how important reputation and ease of claims process is versus price. That's why there are multiple insurers, after all - you can decide how important it is to you. It sounds like you would prefer a simpler claims process, so perhaps you should go with someone who is known for an easier claims process (understanding that no insurer is always going to agree with every claimant 100%).