Title insurance is an important part of the real estate process to understand and to be thoroughly familiarized with because of the important role is plays in protecting the parties to the transaction. Title insurance, at its most basic level, can protect property owners, homeowners and lenders from problems that can arise with the title to the property.

Lenders typically require title insurance to protect their security interest in a property and property owners also purchase title insurance to protect the investment they are making in the property. Title insurance involves an extensive title search to help minimize the risk of problems down the road but also provides protection against litigation and challenges to the validity and legality of the property owner’s rights associated with the property.

Title insurance is a valuable tool to protect property interests. Issues that can arise related to the title to a property can include errors in the public record; undiscovered liens; omitted heirs; and fraud. Title insurance protections will examine the title to the property and ensure any transfer of ownership was by sale, will or gift and that it was made to the intended party. It will also ensure there are no legal claims on the property such as liens, mortgages or encumbrances that would impact the transfer of the title in the sale.

Because a home is such a significant investment, it is important to protect that investment and title insurance is a valuable tool to do that. Potential property owners should understand the role of title insurance, how it works and be aware of the legal issues that come up related to the title for a property.