A title insurer is a company that issues title insurance policies to protect property buyers and lenders from financial loss due to unknown defects or claims against the legal ownership (title) of real estate. By examining public records and assuming liability for covered defects, the insurer guarantees to cover losses and legal expenses arising from liens, encumbrances or ownership disputes that existed before closing.
Before issuing a policy, a title insurer performs a title search to review deeds, mortgages, liens and public records. This process identifies recorded liens, claims or defects so they can be resolved or excluded from coverage prior to closing.
If a title defect emerges after purchase—such as an undisclosed mortgage or a prior ownership claim—the title insurer covers damages and legal costs to defend the owner’s or lender’s interests.
When property lines are unclear or a structure encroaches on a neighbor’s land, title insurers may negotiate settlements or fund corrective actions, ensuring clear and marketable title.
Title insurers also guard against fraudulent deeds or undisclosed heirs by covering losses if a prior owner improperly excluded a rightful co-owner from the deed or forged signatures on closing documents.
Unlike other insurance types that require ongoing payments, title insurance involves a one-time premium paid at closing. Once the policy is issued, protection against covered title defects remains in force for the duration of ownership.
By verifying clear ownership, resolving pre-closing issues and providing financial and legal protection, title insurers bring confidence to homebuyers and mortgage lenders. Their role is crucial for securing property rights and ensuring smooth real estate transactions.
