A title is a legal document that proves a person’s ownership of a piece of property, such as a house or land. It includes information about the property, such as its boundaries and any encumbrances or liens against it.

Title insurance is a type of insurance that protects the holder of the title from financial loss due to any defects in the title that were not discovered during the title search process. This can include issues such as liens, encumbrances, or other claims on the property that were not disclosed at the time of purchase.

When a person buys a property, they will typically conduct a title search to ensure that there are no outstanding issues or claims on the property. This process involves searching public records to identify any liens, encumbrances, or other claims that may affect the property. The title search also includes a review of the chain of title, which is a record of all the previous owners of the property.

Once the title search is complete and any issues have been resolved, the buyer can purchase title insurance. This insurance protects the buyer in the event that any defects in the title are discovered after the purchase. For example, if a lien is discovered on the property after the purchase, title insurance will cover the cost of resolving the lien and any financial losses that the buyer may incur as a result.

Title insurance can also protect the lender in the case of a mortgage. Lenders require title insurance to protect their investment in case of any defects in the title that would put their security at risk.

There are two types of title insurance: lender’s title insurance and owner’s title insurance. Lender’s title insurance is required by the lender and protects their interest in the property. Owner’s title insurance is optional, but it provides additional protection for the buyer in case of any issues with the title.

In summary, a title is a legal document that proves ownership of a piece of property, and title insurance is a type of insurance that protects the holder of the title from financial loss due to any defects in the title that were not discovered during the title search process. It is important for buyers to conduct a thorough title search and consider purchasing title insurance to protect their investment in the property.