When you acquire title, title insurance protects you from defects, liens or encumbrances on your title, under the terms of the policy. To understand why title protection is essential, we need to consider real estate for a moment. This insurance provides home buyers and lenders with vital protection against losses from certain title issues that are undiscoverable from public records, including forgery, fraud, and liens – problems that might limit a home owner’s use and enjoyment of their property.
Insurance that covers the loss of an interest in a property due to legal defects and that is required if the property is under mortgage. Most title insurance is lender's title insurance, which is paid for by the borrower but protects only the lender.
Title insurance in the United States is indemnity insurance against financial loss from defects in title to real property and from the invalidity or enforceability of mortgage liens. Title insurance is principally a product developed and sold in the United States as a result of the comparative deficiency of the U.S. land records laws. It is meant to protect an owner's or a lender's financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. The first title insurance company, the Law Property Assurance and Trust Society, was formed in Pennsylvania in 1853. The vast majority of title insurance policies are written on land within the U.S.