What is title insurance?
Title insurance is a type of insurance policy that protects you against loss should anyone register a claim against your ownership rights in your property.

What sort of claims does a title insurance policy cover against?
Title insurance covers against any number of claims against your title. For example, say a previous owner represented himself as single in his deed, when he was in fact married. His spouse could then decide to seek ownership of the home, since she did not agree to its sale.

Or say in a previous sale of the home, the seller was shown to be of unsound mind when he signed over his property rights. His family could then seek to void the sale and reclaim ownership for themselves.

Other types of claims covered include:

• those made by former owners' undisclosed heirs or people claiming unrecorded easements or forgotten liens
• deeds found to be invalid, forged or signed by minors or persons claiming to be someone they are not
• judgements or restrictions placed against a previous owner's rights to the land or certain uses of it
• those arising from clerical errors or oversights in the property's records
• claims of back taxes or mortgage payments owed by a previous owner

The list goes on.

What protection does title insurance provide?
A title insurance policy insures against any losses suffered due to this sort of legal action, up to the face amount of the policy, and pays any and all legal costs incurred defending your rights against the claim. Depending on the size and extent of the claim, this can add up to thousands of dollars you would otherwise have to cover on your own.

What's at stake if I opt against a policy?
In the most extreme case, a successful claim against your title could result in the loss of your property, without any monetary compensation to you. In other words, you could wind up having to continue paying your mortgage, even though the property is no longer yours.

My lender had me buy title insurance for them when I took out my mortgage. Does their policy cover me, too?
No. The policy your lender had you buy is known as a lender's policy. It protects the lender's investment, not yours. You will need to purchase what is known as an owner's policy to cover yourself. The cost of the policy depends on the value of the home but should be minimal. Also, unlike homeowners' insurance, title insurance is a one-time purchase. A single premium covers you and your heirs for as long as you own the property.

I had a title search done, and it found none of the problems listed above. Why do I still need title insurance on top of that?
A title search is an important first step, and we recommend it for any property purchase. A thorough look at your property's historical record, including deeds, court records and more, can turn up many of the issues listed above before you take ownership of the home.

Unfortunately, no search can uncover everything, particularly errors, omissions or issues related to fraud that have yet to be discovered. A title insurance policy provides peace of mind against these hidden dangers.

Does an attorney's opinion provide the same safeguards as a title insurance policy?
No. Like a title search, an attorney's opinion involves only known documents and cannot account for errors, omissions or issues related to fraud that have yet to be discovered. Plus, if claims against your deed arise after the fact, the attorney who provided the opinion is not liable; you are.


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