Obtaining Proper Title Insurance for Buyers
Protection against undiscovered threats to property owners.

Types of Insurance

As you are probably already aware, there are different types of insurance that you can obtain to protect you from various problems, faults or losses that may occur in the future, such as:

• Health insurance
• Auto insurance
• Life insurance

What is Title Insurance?

Title insurance is a specific type of insurance that protects the insured - that's you- from losses which may occur, due to matters or faults from the past. Unlike the insurances listed above, title insurance will not protect you against any future problems.

Furthermore, with a title insurance policy, you pay a one-time premium that works to protect you from "risks" or undiscovered interests.

There are two principal forms of title insurance:

• The lender's policy
• The homeowner's policy

What is a Lender's Policy?

The purpose of a lender's policy is to provide protection to the mortgage holder.  If for any reason there is a fault in title, which results in a loss, the mortgage holder will be reimbursed.

What is a Homeowner's Policy?

Contrary to that of a lender's policy, a homeowner's policy is designed to protect you - the buyer.  A homeowner's policy will cover you against a loss that may result from a fault in your interest, or ownership that you have in the property.  For these reasons it is a good idea that you should obtain a title policy, so that you can protect the equity in your new home.

What does a Homeowner's Policy Provide?

If you are protected by a homeowner's policy, you are given protection from all financial loss, up to the cost of the title policy, which may be a result of demands that have been charged against the title to your home.

This also includes:

• payment of legal costs if the title insurer has to defend your title against a covered claim
• payment of successful claims against the title to your home covered by the policy, up to the cost of policy.

You will find that there are a variety of title insurance companies that you can choose from.  And it is a good idea for you to first consult your attorney, escrow company, or real estate agent before you make any final decisions, as they can help you make the best choice.

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