When you purchase a piece of real estate, the public archives in your area will keep a record that the transaction occurred. Information about other events that occurred on the property, such as levies or liens, will also remain in these public records.
According to Forbes, title insurance is a type of insurance that will protect you against any third-party claims that arise following the initial title search and after you close on the property. Even if you have owned a property for many years, title issues can still arise, so it can be beneficial to purchase this type of insurance during the buying process.
How this insurance works
Most title insurance policies will cover the cost of paying off an undiscovered lien or protecting you legally when someone else claims rights to your property. This type of insurance can also provide you with a settlement if you buy a property that had a forged deed provided by someone who did not own the home. Additionally, title insurance can protect your right to sell the home later on if an issue arises during a future title search.
What title insurance can protect you against
Some of the most common issues title insurance can protect you against include boundary disputes, conflicting wills, property survey errors and building code violations. A title insurance policy can also protect you from liens from contractors, encroachments and improperly recorded documents.
Many buyers find that they never need to use their title insurance. And although this may be the case with your purchase, having this type of insurance can provide you with peace of mind in the event that an issue ever did arise with the title.