Business and Management

What is Real Estate Title Insurance?

When refinancing your home or trying to buy a new home, the term property insurance comes up at some point. Lots of people don't know what property insurance is, but they buy it every day. In short, property insurance is a policy that limits the risk to buyers, owners, and lenders from real estate transactions. You can also get more information about real estate title insurance online via

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Insurance does not protect all three financially in every transaction, but by eliminating the risk of liability, property insurance has a positive effect on everyone involved.

In the past, when someone wanted to buy a property, they would contact a lawyer to inspect the property. The attorney will go to the courthouse and download all the necessary records to ensure the property is free from mortgages, tax withholding, city detention, and court orders. 

He or she will ensure that the person selling the property is the actual owner of the record and will also check the chain of ownership to ensure that the way the owner acquired the property does not represent a claim by another individual or the Group. If the person buying the property needs a loan, the bank's attorney will ensure the property is vacant or encumbered, meaning foreclosure or other property rights that may be infringed. 

In many ways, the policies of creditors and owners are similar. When someone is refinanced, property insurance is taken out at the borrower's expense to assure the new bank that once their mortgage is completed, it will be at the forefront of foreclosures in the courtroom. At this point, the bank can request a property insurance commitment.