Title insurance

The title to your house or condo is a legal document that serves as proof of your home ownership. Title insurance protects you against loss arising from problems connected to the title (that is, legal ownership) of your property.

By the time you purchase a home, it may have already gone through several ownership changes. Title insurance protects you and the lender from the possibility that your seller or prior sellers didn't have free and clear ownership of the house and property. Without free and clear ownership, the seller can't rightfully transfer full ownership to you.

Generally, a title search during the home sale and mortgage lending process will uncover any title issues. However, there is a chance that a title issue isn't in the public records, that it arose from fraud or forgery, or that it was simply missed through human error.

After you purchase your home, as the legal owner, you might be held responsible for costly, undiscovered expenses such as unpaid real estate taxes or other liens on the property. Title insurance protects you from these past claims.

Unlike other forms of insurance, which cover you for future losses, title insurance extends back in time for an indefinite period. It protects you against losses prior to the date of the policy and ends on the day the policy is issued.

Next steps link: Buying a home? Learn what homeowners insurance covers.