What Is Title Insurance and What Type Of Loss Does It Protect Against?

Title insurance is a type of insurance policy that protects property owners and lenders from financial losses related to defects or issues with the title (ownership) to the property. The title refers to legal ownership or the right to possession of the property.

Title insurance is typically purchased during a real estate transaction, such as when buying or refinancing a home. It can be purchased at any time during ownership, however, so long as no claim or no knowledge of a potential claim exists. Title insurance provides coverage for potential losses or damages that may arise due to problems with the title that were not discovered during the title search or examination process. Some common issues or defects in title that title insurance can protect again include:

• Ownership disputes: Title insurance can provide coverage if another person or entity claims ownership rights to the property, leading to a legal dispute.
• Liens and encumbrances: Title insurance protects against unpaid mortgages, unpaid property taxes, mechanics’ liens, or other outstanding debts or legal claims against the property.
• Forgeries and fraud: Title insurance can cover losses resulting from forged or fraudulent documents related to the property’s title.
• Errors in public records: Title insurance provides coverage if there are errors or mistakes in public records, such as incorrect property descriptions or incorrect information about the property owner.
• Undisclosed heirs or missing wills: Title insurance can protect against claims by previously undisclosed heirs or beneficiaries or issues arising from missing or improperly executed wills.

 
If any of these issues arise and cause financial losses to the property owner or lender, the title insurance policy would likely provide coverage for legal fees, settlement costs or financial losses incurred as a result of the covered defect or issue. It is important to note that specific coverage and exclusions may vary between title insurance policies, so it is advisable to review the terms and conditions of a policy to understand the extent of the coverage provided.

Don’t hesitate to contact Sullivan Law Firm for your title insurance policy or any questions related to title insurance policies. You can schedule a free consultation with us at sullivanlawfirmpllc.com.

* THIS POST IS IN NO WAY INTENDED TO GIVE LEGAL ADVICE OR CREATE AN ATTORNEY-CLIENT RELATIONSHIP. PLEASE CONTACT OUR OFFICE TO SET UP A CONSULTATION AND TO EXECUTE AN ENGAGEMENT AND FEE AGREEMENT.