Definition of Title Insurance

Title insurance is a policy that protects the buyer and/or lender against financial loss resulting from defects in the property’s title, undisclosed liens, or other encumbrances. Issued by a title insurance company, this policy provides coverage for legal expenses and claims arising from title disputes, ensuring a clear title for the property owner.

Related Real Estate Terminology

• Title: A legal term referring to the ownership rights and interests in a property, including the right to possess, control, use, and transfer the property.
• Title Search: The process of examining public records to determine a property’s ownership history and identify any potential issues with the title.
• Lien: A claim against a property as security for a debt, typically requiring repayment before the property can be sold.
• Easement: A right granted to a third party to use a portion of a property for a specific purpose, such as access or utility placement.
• Title Commitment: A document issued by a title insurance company, indicating the conditions under which a title insurance policy will be issued.
• Owner’s Policy: A title insurance policy that protects the property owner against losses due to title defects, liens, or encumbrances.
• Lender’s Policy: A title insurance policy that protects the mortgage lender’s interests in the event of title defects or undisclosed liens.

References

1. Nelson, R., & Whitman, D. J. (2020). Real Estate Transfer, Finance, and Development: Cases and Materials (10th ed.). West Academic.
2. American Land Title Association. (n.d.). What is Title Insurance?