There are many problems that could affect your title, including: tax liens, forged signatures in the chain of title, recording errors, title search errors and claims by missing heirs and/or an ex-spouse. In a nutshell, title insurance protects from future loss if a covered claim against your property is made.
There are two types of title insurance:
1. An Owner's Policy
An owner's policy protects you and provides assurance that your title company will stand behind you, if a covered title problem arises after you buy a home.
2. A Loan Policy
A loan policy protects the lender for the amount of the loan. If you only have a Loan Policy, you are not protected if a problem materializes with your title.
Your home is your most valuable material asset. If the potential loss of your home arises from a covered title problem, an owner’s policy will protect you.
Title insurance is about protection; protecting your home, your family, and yourself. It is about preventing a mishap, or lessening the severity of its impact. Unlike most insurance policies, title insurance is a one-time-only fee. An Owner’s Policy will protect you as long as you and your heirs have an interest in the property.