What is title insurance?
Title insurance offers protection against claims resulting from various defects (as set out in the policy) that may exist in the title to a specific parcel of real property, effective on the issue date of the policy.
 
What is a “defect?”
A defect can include a prior claim of ownership from someone other than the person selling you the property, for instance an ex-wife, a former partner or a co-inheritor. It could also include a claim for an easement, giving someone a right of access across your land. For instance, in a lakeside community, an easement along your lakefront property could provide walkway access to the lake for other residents in the area. Another claim could result from a court judgment against the former owner that resulted in a lien placed on the property. Normally, property and casualty insurance insures against possible losses in the future, such as automobile insurance that protects you against future accidents. Title insurance protects against things that happened in the past, and insurers seek to minimize that risk prior to your purchase of the home. In fact, according to the American Land Title Association, more than 1/3 of all title searches reveal a title problem that title professionals fix before buyers go to closing.