Representation and Warranty Insurance (R&W) is akin to insuring your promises when selling a property. Just as you insure your car or house, R&W insurance safeguards the assurances and guarantees you make during the sale process. Essentially, it offers protection against potential breaches of your word, sparing the buyer from resorting to legal action.

Typically, the cost of R&W insurance amounts to 0.25% to 0.50% of the sale price, with both the buyer and seller sharing the expense equally. However, the deductible, usually half of the total amount, is also divided between the parties.

Think of it as akin to car insurance, ensuring that there are no unexpected "accidents" or breaches of agreement during the transaction.