What is Title Insurance?

Title insurance is a type of insurance that protects property owners from financial losses that may occur as a result of defects in the title to their property. A title defect is any issue or claim that could jeopardize an owner’s right to the property. Examples of title defects include:

  • outstanding mortgages or liens on the property
  • unresolved legal disputes over the property
  • errors or omissions in the public records
  • fraud or forgery in the transfer of the property

There are two types of title insurance: lender’s title insurance and owner’s title insurance. Lender’s title insurance is required by mortgage lenders to protect their interest in the property, and typically the cost of this is passed on to the borrower. Owner’s title insurance is optional, and protects the property owner’s interest in the property.

Title insurance can be a one-time cost, paid at the time of purchase or refinance, and it stays in effect as long as the policyholder or their heirs have an interest in the property. The insurance company will investigate the title and make sure that there are no title defects and will also defend the policyholder if anyone makes a claim against the title.

Title insurance can provide peace of mind to homeowners and can help protect them from unexpected financial losses. It’s important to consider purchasing title insurance when buying a property, especially if there’s a possibility of title defects.

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