Title insurance protects lenders and buyers from financial loss and related legal expenses if there is a defect in title to your property covered by a policy. Prior title defects, such as a previous owner’s debt, forgeries, liens, and other claims of ownership, could end up costing you money, even though you weren’t the owner at the time. Before issuing a title insurance policy, title companies search and examine title plants or public records to identify liens, claims, or encumbrances on the property and alert you to possible title defects. Before issuing a title insurance policy, title companies search and examine title plants and/or public records to identify liens, claims, or encumbrances on the property and alert you to possible title defects.

There are two types of policies:

• Owner’s policy: This policy protects the buyer/owner should a problem with the title arise. It is purchased for a one-time fee at closing and lasts for as long as you own the property.
• Lender’s policy: Protects only the lender’s interests should a problem with the title arise. A loan policy provides absolutely no coverage or benefit for the buyer/owner. This type of policy is a requirement for all mortgage loans.