Determining that your rights and interests to the property are clear is the business of a Titla Insurance company.  The title insurance company completes an extensive search into relevant public records, maps and documents to trace ownership of the property and determine if anyone other than you has an interest in the property.  Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared up before closing.

A lender's policy protects the lender for the full loan amount and an owern's policy protects you as the buyer and can also be purchased at the time of closing.  A lender's title insurance policy means that your lender can be reassured regarding their loan, and with an owner's titla insurance policy, you can be reassured regarding possible problems with your property.  What many people don't realize is that if you are paying for the title insurance, you have the right to choose which company to use.  You can shop around, find the best deal, and reduce your closing costs by encouraging title insurance companies to compete for your business.

There are numerous problems that can arise when buying a house.  A previous owner could have taken out a loan on the property, which would become the new owner's debt.  In a separation or divorce, the previous owner could have taken out a mortgage without the knowledge of their partner.  A lost heir could appear and stake a claim to the property.  An owner's title policy protects new owners from all of these claims.

If one of these problems occurs and you are without owner's title insurance, you could be forced to move out.  You could also legally be required to pay a debt on a house that is no longer yours.  If you have fee title insurance, the title company will handle any litigation or payments towards your case.  In the very rare case of title loss on your property, the title company can pay you or buy the mortgage from the bank.

Most people usually only insure their homes against fire and flood.  If there was a natural disaster on your property and your house was demolished, you would still end up owning the land.  A title insurance policy protects the owner if the actual house is taken away in a disaster.  The title insurance policy coverage will last as long as you own the home.  You can have cover and peace of mind for all these events if they do occur, from only one initial premium.