Many buyers question whether or not title insurance is right for them. To answer the question first we’ll explain what title insurance is and what it does.

What is it? A title is a document that gives you a legal right to a property. Before closing all properties are subject to a title search to insure there are no “clouds” (errors or legal entanglements) that may affect ownership rights.

What does title insurance do? Title insurance protects the owner and lender from these potential “clouds” on a title. There are two types of title insurance.

1.  Lenders Policy

• Protects the lender form title defects, easement problems, judgments or liens.
  
  
• Is mandatory for buyers to purchase.
  
  
• Covers lender until mortgage is paid in full.

2.  Owner’s Policy

• Protects the buyer form title defects, easement problems, judgments or liens.
  
  
• Pays court costs and fees associated with claims or losses.
  
  
• Covered for life ownership of property including heirs.
  
  
• Is optional for a buyer to purchase but highly recommended.
  
  
• Relatively inexpensive for the protection it provides. Costs up to 1% of price of property.
  
  
• Typically a title insurance company will give you a discount if you purchase a lenders and owners policy at the same time.