What is title insurance?
Title insurance is a policy of insurance that provides coverage for the title related risks associate with real estate transactions. It is designed to cover the unpredictable or undetectable issues such as forgery, fraud, missing heirs, etc. that can affect rights of ownership. Because it is insurance, a title insurance policy moves the risk associate with title from the home buyer, the lending institution or the lawyer, to the title insurer.
If there is a problem with title that only becomes known after closing, the title insurer may rectify the problem or compensate the title insurance policy holder, provided the type of problem that surfaces is covered by the title insurance policy.
A title insurance policy will contain:
Risks or losses the policy will cover;
Risks or losses the policy will not cover; and
General terms governing the insurance coverage.
For additional details,