When you buy property you need the assurance that the property you are buying will always be yours. Other than your mortgage holder, no one else should have any claims or restrictions against your home. Title insurance eliminates any risks and losses caused by faults in title from an event that occurred before you owned the property.

Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Other types of insurance such as auto, life or health cover you against losses that may occur in the future. Title insurance does not protect against any future faults. Another difference is that you pay a one-time premium at closing. Once purchased, title insurance remains in effect for as long as you own your property offering peace of mind to homeownership. There are two principal forms of title insurance, the lender's policy and the homeowner's policy.

The lender's policy protects the mortgage holder. If there is a fault in title that results in a loss, the mortgage holder will be paid back. The homeowner's policy protects you, the purchaser, against a loss that may occur from fault in your ownership or interest you have in the property. You should protect the equity in your new home with a title policy.

A homeowner's policy protects you from financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy. The policy also protects you form payment of legal costs if the title insurer has to defend your title against a covered claim. Payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.

There are "hidden risks" protected under a title policy such as: