What is Title Insurance?
More than likely, your home is your biggest investment, and title insurance will protect your interest in that investment. Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or the defects in the title to the property. Each title insurance policy is subject to specific terms, conditions, and exclusions.
For a one-time premium paid at the close of the escrow, a title policy insures against events that occurred in the past of the real property and the past of the people who owned it.
The Owner’s Policy insures the new homeowner/buyer, and a Lender’s Policy insures the priority of the lender’s security interest. A common misconception is that a homeowner/buyer does not need an Owner’s Policy because the Lender’s Policy will also protect the homeowner/buyer. This is false. A Lender’s Policy is not used until (1) a lender must foreclose on a borrower and (2) a title issue must be resolved.
Value of Title Insurance
While other types of insurance (such as flood, auto or homeowners’ insurance) provide coverage that focuses on possible future events, title insurance protects against loss from hazards and defects already existing in the title to a property. Examples: An improperly executed document from a previous sale or a lien against a previous owner.
Another difference between other types of insurance and title insurance is in how the policies are paid. Title insurance is purchased with a one-time premium and provides coverage for as long as the policyholder or their heirs own the property. This is unlike the annual or monthly premiums you must pay for other insurance types.
Examine the cost of title insurance over the life of the policy versus other types of insurance and you’ll find that title insurance policyholders receive great value for the money they spend.
Title insurance companies
Elliott Law Firm, PLLC is authorized to issue title insurance policies through Fidelity National Title Insurance Company, First American Title Insurance Company, and Stewart Title Guaranty Company. For more information about these title insurance companies, visit: