What is the actual protection title insurance provides?
If a claim is made against real property which results in a loss of title to the property or costs to clear up the defect, title insurance will pay compensation up to the fact amount of the policy which is typically the purchase price amount. If it is necessary to defend title to the property by a claim of ownership filed by another owner, title insurance will pay the cost of the defense even if the costs exceed the face amount. When title insurance is ordered, a title search of the public records is conducted to determine what documents have been filed in the public records pertaining to the subject property, including easements and restrictions. If a survey of the property is prepared using a title search of the property, then the owner will be insured against any encumbrances that do not appear on the survey that are later asserted. This is particularly important with regard to boundary disputes that arise from overlapping legal descriptions or areas that are occupied by a property
