Home Buying: Title Insurance

The concept of title insurance can be very confusing. There are three characteristics that make up title insurance: (1) It protects ownership rights from both fraudulent claims against ownership and from mistakes made in earlier sales (mistakes in spelling of a name or inaccurate property description); (2) It is a one-time cost based on the sales price of the property; (3) there are both lender title policies (which protect the lender) and owner title policies (which protect the owner). Overall, title insurance can insure against devaluation or cloud on title that may occur because of incorrect information provided by the title company.