The Owner’s Policy insures the new home owner/buyer, and a lender’s policy insures the priority of the lender’s security interest.

Purchasers and lenders need title insurance in order to be insured against various possible title defects.  The buyer, seller and lender all benefit from the issuance of title insurance.

Title insurance protects against claims from defects.  Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the actual policy.

Insurance such as car, life, health, etc., protects against potential future events and is paid for with monthly or annual premiums.  A title policy insures against events that occurred in the past of the real property and the people who owned it, for a one-time premium paid at the close of the escrow.

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.

Simply stated, the title to a piece of property is the evidence that the owner is in lawful possession of that property.