Title insurance will protect against claims specified in the insurance policy. Such claims are from defects like forgery, fraud, easements, encroachments, liens and improperly recorded documents. Title insurance will also protect against someone fraudulently claiming ownership interest on a property. Title insurance can protect the
buyer from problems such as:
- Errors in deeds
- Outdated will
- Forgery of documents
- Mistakes during examination of records
- Undisclosed heirs
An owner’s policy will cover:
- Financial loss due to claims against the title
- Legal costs in case a covered claim has to be defended in court
- Payment of successful claims against the title
For lenders, the title insurance is knowns as a loan policy. A loan policy will usually be of an amount equal to the loan and it protects the lenders in case a problem comes up with the title of the property. A loan policy, however, does not protect the buyer or the owner.