Title Insurance

Title defects can include errors in public records, undisclosed liens or debts attached to the property, forged documents, unknown heirs claiming ownership or boundary disputes.

Title insurance is especially common in the United States, where it is usually required by mortgage lenders. There are two main types. A lender’s policy protects the lender’s interest in the property. An owner’s policy protects the buyer. Both are typically paid for with a single premium at the time of purchase and last as long as the insured has an interest in the property.

For example, if after buying a home, the owner discovers an unpaid debt from a previous owner secured against the property, title insurance could cover the cost of resolving the claim.

Before issuing a policy, the title company searches public records to identify problems. Title insurance is less common in the United Kingdom, Australia and many other countries, where government-guaranteed land registration systems provide greater certainty of ownership, although it is used in some situations, such as to cover specific known risks.