Title insurance is a type of indemnity insurance that protects both homebuyers and lenders from financial loss due to defects in a property’s title. Here’s a breakdown of what it is and why it’s important:
What is Title Insurance?
Title insurance covers issues that might arise with the ownership of a property after the purchase. These issues can include:
Liens: Claims against the property due to unpaid debts by previous owners.
Easements: Rights for others to use parts of your property, which might limit how you can use it.
can use it.
Encumbrances: Other claims or restrictions on the property, such as zoning laws or restrictive covenants.
Why Do You Need It?
Protection Against Financial Loss: If a title defect is discovered after you’ve purchased the property, title insurance can cover the legal costs and financial losses associated with resolving these issues
Lender Requirement: Most mortgage lenders require title insurance to protect their investment in the property.
Peace of Mind: It ensures that you have clear ownership of the property and protects against any future claims that could arise
Title insurance is typically a one-time premium paid at closing, and it can provide significant protection and peace of mind for both buyers and lenders.
