Real Estate Terms:What is "Title Insurance"?

Title insurance is insurance that protects the lender and the buyer against any losses incurred from

disputes over the title of a property.

In other words: A policy of title insurance is a contract of indemnity between the insurance company and

the owner of an interest in real property. In plain English, this means that in the event that the insured owner

of an interest in the insured property suffers an actual or threatened monetary loss, due to a title defect, lien

or other matter of public record created prior to the effective date of the policy, that is not excluded as an

exception to the policy, the title insurer will defend the insured against a lawsuit attacking the title, or

reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided

by the policy. Typically the immovable property interests insured are fee simple ownership or a mortgage.

However, title insurance can be purchased to insure any interest in immovable property, including an

easement, lease or life estate.

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