What is title insurance?
Title insurance protects you and your mortgage lender by insuring that no individual or government entity has any right, lien, claim or encumbrance to your property. Once a title policy is issued, if any claim which is covered under the title policy is ever filed against your property, the title company will pay the legal fee involved in defense of your rights, as well as any covered loss arising from a valid claim.
Insurance that protects the lender (lender’s policy) or the borrower (owner’s policy) against loss resulting from any defects in the title or claims against a property that were not uncovered in the title search, and that are not specifically listed as exemptions to the coverage on the title insurance policy.
Title policies insure owners and lenders against possible losses from claims against real property ownership. The preliminary report called a commitment provides advance information on accepted matters from coverage. Both parties are given an opportunity to correct flaws before the actual purchase or lending. Established in the 1870’s because of land ownership problems from inaccurate record searches, forgeries and similar problems, today it offers protection from certain items that cannot be ascertained from the public records. Depending on your type of coverage a title insurance policy is similar to a pre-paid legal agreement in that your insurer will provide legal defense against claims and challenges to your insured title and will reimburse you for losses due to the covered defects in your ownership rights.
