Understanding what Title Insurance Is

What Does a Title Company Do?

The title company plays a critical part in protecting your investment. They conduct a title search to ensure the seller has a clear and marketable title to transfer to you. This search checks for any outstanding liens, judgments, or ownership disputes that could affect your rights to the property. If anything is found, it must be resolved before closing.

Once the search is complete, the title company issues a Title Commitment, confirming that the property is free and clear of any legal encumbrances. This is one of the key tasks they’re working on behind the scenes while we’re under contract.

What Is Title Insurance—and Why Does It Matter?

To safeguard your ownership, the title company provides two types of insurance:

• Lender’s Title Insurance – Required by your mortgage lender to protect their interest.
• Owner’s Title Insurance – Optional but highly recommended, as it protects you from hidden title issues like recording errors, undiscovered claims, or fraud.

Unlike other insurance policies, title insurance is a one-time fee paid at closing. The seller typically covers the Owner’s policy, while the Lender’s policy is included in your closing costs at a discounted rate.

How Does Title Insurance Protect You?

Even after closing, unexpected issues can arise—such as a surprise lien or an unpaid utility bill tied to the property. If that happens, your title insurance policy steps in to help resolve the situation, covering legal costs or financial obligations as needed. Think of it as a safety net—just like car or homeowners' insurance—for your biggest financial investment.