Title insurance is an important part of any real estate transaction, whetherbuying or selling a property. It helps protect parties who are buying or lending against claims of past occurrences such as back taxes, liens, conflicting wills, or inaccurate records. Title insurance is a one-time fee paid to the title company for both homeowner and lender to ensure that the title to the property is clear from any issues that could arise.

When a title is issued, the title company conducts an extensive examination of the property's title record to determine its legal condition. During this process, the title company researches historical records and traces ownership back to the property’s original owner. It also seeks out any liens, judgements, attaching interests or encumbrances that might be associated with the property. The title company also performs a deed search to ensure that all documents related to the transfer of property are legally valid.

By purchasing a title insurance policy, you are ensuring that the title is free and clear of any (and all) impediments. Lenders require buyers to purchase title insurance so that they are able to recover any losses due to a title issue. Without a title insurance policy in place, lenders are unable to recover any losses due to a title issue. Therefore, lenders assume the majority of the risk with respect to the title of a property.

In addition to protecting lenders and buyers, title insurance also protects homeowners against potential legal actions that could arise as a result of a title defect on their property. This can include property disputes with neighbors, issues with zoning laws, or inaccurate survey lines. Title insurance covers the costs of defending with any legal action that could arise from title-related issues.

Overall, title insurance is an essential part of the real estate purchasing process. Without the protection afforded by title insurance, lenders and buyers would be at undue risk of financial loss due to any title defects. With title insurance in place, however, lenders and buyers can be rest-assured that their interests are properly protected in the case of any title related issues.