Title Insurance is a form of insurance that protects homeowners and their mortgage lenders against defects on their home’s title. Such defects may include unpaid liens, encroachments or ownership claims against a property. If such a claim were to be made against a homeowner, the title insurance policy will defend against such a lawsuit, citing the title research that the insurer did at the time of policy issuance.
There are two primary forms of title insurance. An owner’s policy is purchased at the time a home is bought and lasts for the duration of ownership of the home. A lender’s policy is purchased each time a mortgage is originated against a home. It is customary that the seller pays for the buyer’s title insurance policy at the time of sale. Lender’s title insurance policies are always paid for by the borrower.