Title insurance protects property damage or loss that may result from a lien, encumbrance or title defects. Title insurance is an essential part of any home-buying transaction. Once a sales contract is accepted, then a title expert will search through public records to see if any problems exist with the home's title.

Many title problems are unknown to home and business owners and may surface during the preliminary title report. Issues like unpaid contractor's lien or unpaid taxes may be found. Your title insurance company will start to work on clearing up any issues by taking corrective actions to fix any issues with the chain of title to the property or related problems.

Nearly all traditional lenders require title insurance, and by having title insurance, a home and business owner has insured legal possession to the property. Title insurance from a major carrier protects both the home buyer and the lender. While there is a wide range of title insurance policies available, the two typical policies are the lender's policy and buyer's/borrower's policy.