What is title insurance?
There are two types of title insurance. Lenders’ title insurance is required by virtually all lenders to assure them that should a title defect arise, their investment in the subject property is protected. Lenders require the Borrowers to pay for lender coverage as a condition of obtaining a loan. Owners title insurance protects the purchaser from any title claims arising from the previous ownership. The owner is protected from such problems as fraud, forgery and filing errors.
“Title Insurance” is insurance against loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. It is available in many countries but it is principally a product developed and sold in the United States. It is meant to protect an owner’s or lender’s financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. Typically, the real property interests insured are fee simple ownership or a mortgage. However, title insurance can be purchased to insure any interest in real property, including an easement, lease or life estate.
Title insurance is a contract to protect an owner against losses arising through defects in the title to real estate owned. If the title is insurable, the company guarantees the owner against loss due to any defect in title or expenses in legal defense of the title pursuant to the terms of the policy.
