Title Insurance is an insurance policy that protects you from any other individual or entity that might have a right, lien or claim to the property that you are purchasing. This is a very important policy since there are times things come up to cloud a title such as inheritance or mechanical liens and without it, you could be at risk of loosing your property.

The very first thing that is done is a title search to make sure there are no individuals or entity that has a current right, lien or claim to the property thus making sure the title is clear and can be transferred. This is the business the title insurance company does everyday and the policy insures that it stays this way or takes care of any claims that come up.

You may think this is just another “fee” you have to pay but the truth is, for a modest one-time title insurance premium paid at closing, you receive continuous title insurance protection in an amount equal to the purchase price of the property or its current market value. This premium typically includes your “owners” policy as well as the “lenders” policy. Because the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing, you don’t have to worry once you close that any claim could jeopardize your property.

The title insurance owner’s policy will have a complete description of your property and outline any recorded limitations on your ownership. It will also set forth the title insurance company’s responsibilities should any claim covered by the policy terms arise. Typically your title insurance will protect you from the following loss:

• If someone contests your title in legal action (the title insurance company will defend the title at no expense to you),
• If there is a title defect that cannot be eliminated (the title insurance company will protect you from financial loss – up to the amount of the policy)

Be sure to use our mortgage calculator before you buy.