title insurance and why do i need it?

Each time real estate is bought or sold a record of the transaction is filed in public archives. Similarly, other occurrences that affect the ownership of property, such as liens or levies, are also publicly archived.  Unlike auto or health insurance – that protects against potential future events – title insurance insures against events that occurred in the past of real estate property and the people who owned it.

When you buy a title insurance policy, essentially you are paying a title company to search the public records to find and fix – if possible – any ownership issues. However, as hard as one may try, even the most skilled title professionals may not always find all the problems associated with a property.  Some risks can be hard to identify, such as issues due to filing errors, forgeries, or undisclosed heirs; for this reason, a title company will provide you with an owner’s title insurance policy and your lender with a Lender’s Title Policy.  An owner’s policy of title insurance insures your ownership rights to the property; protects you from loss and requires the title company to defend you if your ownership is ever challenged.   It also protects your lender’s interest in the property until your loan is paid off

Title insurance coverage does not ever expire. For as long as you own your home it is in effect.  While a title search may not always reveal a defect in the title, with a title insurance policy you can relax knowing that you are covered if one is ever disclosed in the future.