Title Insurance

Title insurance is different than most other types of insurance. Where most insurance is the contractual "coverage" where one party indemnifies or guarantees another party against a possible specific type of loss (such as an accident or death) at a future date, title insurance attempts to detect, prevent, and eliminate risks and losses caused by title problems which have their source in past events. Title companies attempt to achieve this by searching public records to develop and document the chain of title and to detect whether there are any adverse claims on the subject property. Any issues found are either fixed before issuing the title policy or the coverage is specifically written to exclude those items.

Just as lenders require hazard (fire) insurance and other types of insurance coverage to protect their investment, most lenders will also require title insurance as security for their investment in real estate.

There are two basic kinds of title insurance:

Lender's policy - This type of policy is called the ALTA policy and is a standard policy approved by the American Land Title Association. The lender's policy protects the lender for the amount of their loan.

Owner's policy - The owner's policy guarantees ownership that is free from defects or encumbrances, except any listed as exceptions in the policy. It covers losses and damages suffered if the title is unmarketable (i.e., if the title can not be legally sold and conveyed to another party), if the property is found to belong to someone else, if there is no access to the land, or if there is some other defect or lien on the title. An owner's policy will specifically list what is covered as of what effective date.

What is Insurance - Home

Table of Contents

What is Insurance Introduction

History of insurance

Types of insurance:

• Auto insurance
  (car insurance or motor insurance)

• Home insurance
  (homeowners insurance or household)

• Boiler insurance
  (machinery and equipment insurance)

• Title insurance

• Health Insurance
  (private and public health insurance)

• Life insurance
  (whole life or term life insurance)

• Political risk insurance

Types of insurance companies

Life insurance and saving

Criticisms of the insurance industry
(arguments for universal heathcare)