Title Insurance is an insurance policy. It is different from other forms of insurance. Automobile insurance, for example, protects you from some future event, be it a fender bender or theft of the car. Title Insurance also protects you from some future event, like a claim or loss due to a title issue. The difference is that these issues were cause by a past event. The event causing the claim procured prior to your purchase of the property.

Another big difference from other insurances you may carry is that Title Insurance on your real property is a one-time premium. There is no annual premium to keep the policy in effect. It covers your real property as long as you or your heirs own/remain an interest in the property.

Let’s go back to the original question. Why do you need Title Insurance? The easiest answer is to protect what is probably the biggest and most important investment you will ever make.

What sort of issues are covered? Here is a short list of some of the more common risks that can cause a loss or encumbrance of title:

♦ false impersonation

♦ forged deeds

♦ fraud

♦ undisclosed or missing heirs

♦ deeds by persons purported to be single when actually married

♦ liens for unpaid inheritance, income or estate taxes

What happens if any of these defect or hidden risks are discovered? Title Insurance covers the cost of defending any lawsuit against your title as insured. It will also rectify any issues discovered or pay any losses for the insured. It is important to understand that these claims can arise from a past event that could not be discovered in a public record search. Therein lies the true value of Title Insurance.

So the answer is simple. You need Title Insurance because it provides peace of mind in knowing that the property you are buying and the investment you are making is a safe one.