Title insurance protects the home buyer and lender against loss resulting from title defects, whether these defects are known or unknown at the time of sale.
All lenders require title insurance policies for the loan they are making, but that loan policy only covers their interest in your property. You, the homeowner, are not covered unless an owner’s title policy is issued. Without an owner’s title insurance policy, you may be held fully accountable for any prior liens, judgments or claims brought against your new property.
It would be unsettling to most people to make what is often the largest investment of their lives without some protection against undisclosed or undiscoverable title problems. Forged deeds, wills, undisclosed or missing heirs, and mistakes in recorded legal documents are just a few of the common hidden risks that may cause a loss of title or create an encumbrance on your title. Your title insurance policy can give you the peace of mind in knowing that possibly the largest investment you will ever make is safe.