Title Insurance is an insurance policy designed to keep the buyer and/or their mortgage lender from risks associated with defects in the title (ownership) of the property. Title Insurance is offered as either a standard policy or an enhanced policy. A standard policy covers defects in the title up to the date of settlement. An enhanced policy covers defects in the title before and after settlement.
Covered claims can range from any of the following and more: undiscovered easements that affect the use of your property, errors, fraud or illegal signatures on the title paperwork going back many transactions, errors in public records, a disputed will from a previous owner, and previously unreleased liens on the property that could make it difficult to sell. Title insurance companies will usually assume the risk of defending the claim. Title insurance companies pay out claims on a policy at a rate that is ten times higher than the payout rate on homeowner’s policies.