What is "title insurance"?

Title insurance is a specific type of insurance that provides protection against potential defects in a property's title. When someone purchases real estate, they want to ensure that they have clear ownership of the property and that no issues exist that could affect their rights to it. Title insurance helps to mitigate risks such as undisclosed liens, incorrect property boundaries, fraud, or previous ownership claims that could surface after the purchase.

This insurance comes into play both at the time of purchasing property and for potential future claims. In the event that a title defect is discovered after purchasing the property, title insurance can cover the legal costs and losses incurred in resolving these issues, thereby protecting the investment of the new owner.

On the other hand, policies related to property taxes, damages incurred during a sale, or coverage for natural disasters do not specifically cover the ownership rights and potential title defects that title insurance addresses. Each of those provides a different kind of protection and does not serve the significant purpose of ensuring the buyer has clear and uncontested title to the property.