Title insurance is basically protection purchased by the buyer should any claims, such as liens (leans), judgments, or pending lawsuits, be found against the title once the home is purchased. Usually the title company will search the public records that report the description of the property, the identity of the owner, and any title defects, liens, or judgments against the property. Once this is complete, and nothing has been found against the title, an insurance policy is issued. If at any time while you own your home, it is discovered that someone else has a claim on it that should have been revealed in the title search, you will be reimbursed for your loss. This doesn't mean however that no one can ever claim ownership of your home, nor does it mean that if someone does, you are assured you'll get to keep the home. Your broker or agent will work closely with the title company. The company can issue two kinds of policies - a lender's policy, which covers only the lender until the mortgage is paid off, or an owner's policy, which covers you as long as you own your home. If you're getting a new mortgage, the lender may want you to buy a lender's title insurance policy. The lender's policy, however, doesn't protect you. To protect yourself, you must buy an owner's policy. If you do get both owner's and lender's title insurance, it's usually cheaper to buy them together from one company. Also, even though title insurance companies are regulated, the insurance rates vary enough to make it worthwhile to shop around. For more information on title insurance, consult with an attorney knowledgeable in the area of real estate law.
