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Why Do You Need Title Insurance?

Title Insurance is the type of insurance that covers the potential damages from errors in the ownership records of the home or property. In most of the cases, you purchase title insurance when you get a mortgage. Title Insurance Policies cover either a homeowner or mortgage lender, but you will usually need to pay for both types as part of your closing costs.

A Title Insurance Policy pays policyholder if there is anything wrong with a title for a property.  Every title policy covers either a homeowner or the lender that financed the mortgage for the property. The lender requires to pay for lender’s title insurance as a part of your mortgage closing cost. There are many national title insurance company that claims to provide insurance coverage when you buy the policy and extend indefinitely into the past that covers both known and unknown inconsistencies in the document history of ownership.

Title Insurance

In this article, we will discuss why do you need Title Insurance in great detail.

Purchasing lender’s title insurance is a mandatory part of the mortgage process. However,  it is often a good idea to buy title coverage as a homeowner. Title Insurance can compensate for your damage or legal cost in a variety of situation.


Title Insurance provides national default title services  that protect you from

  • Previously unreported lines and easement on the property
  • Forged transfer of ownership right in the property.
  • Unintentional errors in recording or filing of documents
  • Any other title defects that existing prior to the start of your policy.


While the actual number of the claim paid out to the title insurance purchases is relatively small, the open-ended nature of land recording means that there are several scenarios where title insurance save thousands of dollars in legal fees. The possibilities of the defective title go up if you are purchasing a foreclosed or otherwise troubled property. In most extreme situations, title insurance could end up compensating you for forfeiture for the whole property.



You can choose your own title insurance company for both lender’s and homeowner’s title insurance, although few people actually do so. If you are considering purchasing a homeowner’s policy for yourself, it makes sense to do your own shopping. Title Insurance can often provide a discount if you purchase both sets of policy at the same time.  

Well, we have discussed thoroughly what title insurance exactly is. If you still have doubt, then go to this link. This website gives you an insight into what is title insurance with examples that helps you to understand better.