What is title insurance and why is it important?

Every homeowner expects the ability to enjoy certain property rights. Property rights include things like the ability to take out a loan against the property, the ability to occupy the property, the ability to own the property free and clear of liens or commitments from the previous owners, and the ability to freely convey or sell the property. Title insurance provides protection against any title issues that could affect a homeowner’s property rights and the ability to use the property as intended.
Title insurance is important to protect every homeowner’s property rights against issues that are not always apparent in title searches. Even though title companies and attorneys will conduct a title examination going back many years, things like fraud, forgery, incapacity, and impersonation can remain hidden. Why should everyone obtain owner’s title insurance? A comprehensive policy can cover losses in connection with boundary disputes, restrictive covenant violations, and encroachment issues. Lenders recognize the importance of title insurance and will likely require a lender policy for every loan. The lender’s policy, however, will only protect the lender’s interest, not the homeowner’s interest. Title insurance is purchased with a low one-time premium that provides coverage as long as the homeowner retains an interest in the property. The stakes are too high to not protect such a great investment!