Traditional insurance policies protect insureds against future losses. Title insurance relates to the ownership of property title and liabilities that may effect that stem from claims for past occurrences. 
Who does title insurance protect?
Two different types of title insurance exist. A real estate owner can choose to purchase title insurance and lenders can elect to do so as well. Lenders will require title insurance by mortgagors in order to secure their security interest in the property. Furthermore, a property owner will purchase title insurance to protect their investment in their property.
How the purchase of title insurance differs from other types of insurance.
As with traditional insurance companies, that often involve required monthly payments, title insurance only requires a one-time payment. This insurance will vary according to the price on your home and according to the state that you will purchase a home.
The necessity of title insurance.
The fact is that title insurance has protected a large amount of insureds. An estimated 4-5% of title insureds have been paid been paid out on their policy. However, these problems protected by the claims were unlikely to be detected by an ordinary purchaser. Only title insurance would protect the homeowner purchasers.
Common types of title insurance claims include:
- Undiscovered Liens
- Omitted Heirs
- Fraud
- Errors in the public record
What specific claims does title insurance cover?
These claims include certain errors that were made in inputting information into the public record. A title examiner will assess the title by analyzing the chain of ownership of the house. They will insure that the property passed either by sale, through will, or maybe even in a gift to the correct and intended person.
The short end is that a title policy protects that small group that has a problem. Title insurance is a valuable protection for home purchasers since this group really has no way of detecting the problem before it arises. To be safe, it it is worth to spend the average cost of $834 for title insurance.
For more information about title insurance and how it protects home owners, contact Ralph Aponte, President, Counsellors Title Agency. 732.914.1400.