Title insurance is a form of insurance which insures the policy holder against not only financial loss from defects in the property’s title to real property but also the protection from the invalidity or unwarranted enforcement of mortgage liens. It is meant to protect an owner’s or a lender’s financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit arguing the title as it is insured, or reimburse the insured for the actual monetary loss incurred, in accordance to the amount of provided insurance agreed upon by the policy.

When purchasing a property, you should have the confidence and ability to acquire a clear and obtainable the title to the purchased property.  Unfortunately external challenges may prevent the ease and possibility of  your clearly defined and executed rights of ownership, even in court.  In additional to the associated legal fees and costs that may be acquired in the process, there is still the possibility that your defense fails and you may potentially lose the property while also experiencing a serious financial loss.

As a result, the cost of defending against a title claim and the expense of a title loss may become the sole responsibility of a real estate purchaser, and/or mortgage lender. This is the primary cause for most lender’s requirements for the purchase of title insurance of home buyers.  A new owner’s title insurance policy is also important because, previously undisclosed title problems could emerge from the past, or there may be new and developing problems, regardless that the seller owned the property for only a short time. The seller may have been divorced, become bankrupt, or agreed to an easement across the property. A new owner’s title policy will protect you against these types of problems.