What is Title Insurance?
Title insurance protects against financial loss from defects in a property's title, such as liens, encumbrances, or ownership disputes, that existed before your purchase.
Title insurance is a policy that protects the lender and/or buyer against losses arising from title defects like unpaid taxes, forged documents, or undisclosed heirs. Lenders typically require a lender's policy, while an owner's policy is optional but recommended. Borrowers encounter it during closing when a title search reveals potential issues. Watch for the difference between lender's and owner's policies, the one-time premium cost, and whether the seller will contribute to it. A clean title search does not eliminate all risk, so owner's coverage can be valuable. Review exceptions listed in the policy.
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