Buyers want the guarantee that they are the correct owner of the house and that if others claim the land, they have the means and money to cover the investment costs and attorney fees and other costs of defending the property.
If a problem should occur in the future, the term defines policies covered and excluded losses. Your lender must provide policies for you within a reasonable time after it is issued. To know more about title insurance you can visit https://www.clearskiestitle.com/.
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There are two types of title insurance:
1. Lenders Insurance: protects your lender against losses that may occur due to unknown title defects. It also ensures the lender to have a valid first lien against the property.
2. Owners Insurance: protecting you, the buyer, of the problems that may arise after you close the sale. Examples of issues may include human error, false documents, undisclosed heirs or lost, and the legal description wrong.
Only the owner's policy will protect you from personal liability, such as legal fees to dispute after sale. You pay when the policy is issued. This assures you as long as you own the property.
This protection is limited to the face amount of the policy, which is usually the market value of the property when you buy it.
Generally, to remove a cloud on the title of the owner must file a lawsuit-to-quiet-title; in other words, a suit to remove the cloud where the court determine the rightful owner of the property.