What is Title Insurance?

Title insurance insures against financial loss from defects in title, liens, or other matters. It protects both purchasers and lenders against loss by the issuance of a title insurance policy. While the purpose of most other types of insurance is to assume risk through the pooling of monies for losses happening because of unforeseen future events (like sickness or accidents), the primary purpose of title insurance is to eliminate risks and prevent losses caused by defects in title arising out of events that have happened in the past. To achieve this, title insurers perform a thorough search and examination of the public records to determine whether there are any adverse claims (title defects) attached to the subject property.

What’s involved in a title search?
Chain of Title – History of the ownership of the subject property
Tax Search – The tax search shows the status of the taxes and assessments.
Judgment and Name Search – Searches for judgment and liens against the owners’ and purchasers’ name

After the three searches have been completed, the file is reviewed by an examiner who determines:
If the Chain of Title shows the party selling the property has the rights to sell                         
If the taxes for the subject property show the existence of any special assessments against the land and whether or not these assessments are current.
Whether there are any unsatisfied judgments against the previous owners, sellers, or/and purchasers

Once the searches have been examined the title company will issue a commitment, stating the conditions under which it will insure title. The buyer, seller and the mortgage lender will proceed with the closing of the transaction after clearing up any defects in the title that have been uncovered by the search. The policy is issued after the closing of your new home, for a one-time nominal fee, and is good for as long as you own the property 

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