What is title insurance and what does it protect?


For homeowners and real estate investors it is important to know what is title insurance.

Title insurance protects the property from possible claims over the title/ownership of the property. A title check and lender's title insurance policy is always required to purchase prior to obtaining a mortgage.

In case a claim arises over your property's title the lender's interest will be protected by the title insurance policy. Your interest in the property as a homeowner will be protected if you purchase owner's title protection coverage.

Title protection coverage differs from other insurance types.

A title insurance policy will protect the lender and you only from claims arising from past defects - that is, defects in the title that occurred prior to obtaining the policy. If false claims after you bought the real estate arise, there is no protection with a standard title insurance policy. To be protected in that case, you may have to buy ALTA Homeowner's Policy.

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