What is Title Insurance?
Title insurance is different from other types of insurance
in that it protects you, the insured, from a loss that may
occur from matters or faults from the past. Other types of
insurance such as auto, life or health cover you against losses
that may occur in the future. Title insurance does not protect
against any future faults.
Another difference is that you pay a one-time premium. A
title insurance policy will protect you from "risks" or undiscovered
There are two principal forms of title insurance:
The lender's policy
The homeowner's policy
What is a Lender's Policy?
A lender's policy protects the mortgage holder. If there
is a fault in title that results in a loss, the mortgage holder
will be paid back.
What is a Homeowner's Policy?
A homeowner's policy protects you, the purchaser, against
a loss that may occur from a fault in your ownership or interest
you have in the property. You should protect the equity in
your new home with a title policy.
What does a Homeowner's Policy provide?
Protection from financial loss due to demands that may be
charged against the title to your home, up to the cost of
the title policy. Payment of legal costs if the title insurer
has to defend your title against a covered claim. Payment
of successful claims against the title to your home covered
by the policy, up to the cost of the policy. There are many
title insurance companies to choose from. Your attorney, escrow
company, or real estate agent should be able to help you make