Title Insurance
Coverage designed to protect against certain covered defects in title that existed before the policy was issued.
01
What It Means
Title insurance is an indemnity policy that protects against covered losses arising from defects in title that existed as of the policy date — forged documents, undisclosed heirs, recording errors, unreleased liens, or other matters not identified during the search.
Unlike property or casualty insurance, which covers future events, title insurance looks backward. It is generally paid once and remains in effect for as long as the insured holds the covered interest.
02
Why It Matters
Public records are extensive but imperfect. Title insurance exists because even careful research cannot guarantee that every past transfer, release, or heir is accounted for.
The policy also typically includes a duty to defend covered claims, which can matter as much as the indemnity itself.
03
Common Misconceptions
- "Title insurance covers anything that goes wrong with the property." It covers title defects, subject to the policy's terms and exceptions — not condition, boundaries, or value.
- "The lender's policy protects me." A lender's policy insures the lender's interest only; owner's coverage is separate.
- "I pay premiums every year." Title premiums are generally a one-time charge at closing.
04
Questions to Ask
- What policies will be issued in this transaction, and who pays for each?
- What are the standard exceptions, and can any be removed?
- What endorsements would you recommend for this property?
- What is the policy amount, and how was it determined?
- How do I make a claim if an issue arises later?
05
Related Reading & Resources
The most successful real estate decisions often involve collaboration between several professionals working toward the same goal. Understanding each person's role helps you ask better questions and make more confident decisions.
06
Other Title Terms
- Title SearchThe research process that traces recorded ownership and identifies documents affecting a property's title.
- Title CommitmentThe document that sets out what the title company found and the terms on which it would insure title.
- Owner's PolicyThe title insurance policy that protects the buyer's ownership interest rather than the lender's loan.
- Lender's PolicyThe policy a lender requires to insure the validity and priority of its lien.
- EscrowThe neutral holding and disbursement of funds and documents according to the parties' written instructions.
- ClosingThe point at which documents are signed, funds are disbursed, and ownership transfers.
Questions About the Closing Process?
Closing on a property involves many moving parts, from title research and escrow to signing documents and recording ownership. I'd be happy to help you understand the process, answer your questions, and connect you with experienced title professionals as you prepare for your transaction.
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