Despite being intrinsically tied to most real estate transactions in the United States, title insurance is seldom understood by prospective home buyers. Here are five concise facts about title insurance that you should know before going to the closing table:

1 – Title Insurance is an Indemnity Contract

In essence, a title insurance policy is a legal pledge by an insurer that legal interest in a real property is properly transferred and conveyed. A title insurance policy offers coverage in case of financial loss caused by a deficiency that may strip title away from an owner or lien holder. In other words, a title insurance company provides assurance to a homeowners and mortgage lenders that they can take ownership interest in a property. Continue reading →