Title InsuranceTitle Insurance is an insurance policy that protects the owner of a home or piece of property from problems or defects with the title. Title is written evidence that the owner of a piece of property is indeed the lawful owner of that piece of property. The insurance policy is kind of like a back-up in case anyone comes along and contests or disputes your ownership in that property. Getting title insurance is a standard part of escrow when you buy or sell a piece of property. You get it if you are buying. If you are selling, the person buying your property should get it. It is insurance specifying that the title company did a thorough and complete job during the transfer of ownership from buyer to seller. If the title company did not do a thorough job then they have to pay for any future issues or problems that arise if someone ever comes along and says that they own your property not you. During escrow, the title company is responsible for searching the public records on titles to real estate to determine the previous owners of a particular property. Their job is to make sure that the seller is the person on title to the property and that they and only they have the legal right to sell this property. The insurance policy is the buyer's proof that the title search was completed. It serves as protection in case any mistakes occurred. Another, reason for insurance is to ensure that there are no outstanding liens against the property. A lien is a legal claim against a property that must be paid when the property is sold. If you didn't have any insurance and a lien had been placed against the property you were buying, you would be responsible for that lien. In essence you would have to pay for someone else's debt. A title insurance policy would locate any liens. The previous owner would be forced to take care of the liens before the property could be sold to you.
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