Title Insurance

A A A

DEFINITION

Insurance that covers the loss of an interest in a property due to legal defects and that is required if the property is under mortgage. Most title insurance is lender's title insurance, which is paid for by the borrower but protects only the lender.

Owner's title insurance is a separate policy; in some areas it is paid for by the seller to protect the buyer's equity in the property.

INVESTOPEDIA EXPLAINS

While a lender's policy only protects the lender against loss, the fact that the policy was issued reflects that a title search has taken place, which can give some assurance to the buyer. However, title searches are not 100% infallible, hence the need for insurance.


RELATED TERMS
  1. Chain Of Title

    The official record of ownership of a property or asset. The chain of ownership ...
  2. Quiet Title

    A lawsuit filed to establish ownership of real estate when ownership is in question. ...
  3. Recording Fee

    The fee charged by a government agency for registering or recording a real estate ...
  4. Closing Costs

    The expenses, over and above the price of the property that buyers and sellers ...
  5. Title Search

    An examination of public records to determine and confirm a property's legal ...
  6. Title

    The right to the ownership and possession of any item that may be legally recognized ...
  7. No-Cost Mortgage

    A mortgage refinancing situation in which the lender pays the borrower's loan ...
  8. Cloud On Title

    Any document, claim, unreleased lien or encumbrance that might invalidate or ...
  9. Reinsurer

    A company that provides financial protection to insurance companies.
  10. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s ...
Related Articles
  1. 5 Tips For Recession House Hunters
    Home & Auto

    5 Tips For Recession House Hunters

  2. Understanding Your Mortgage
    Personal Finance

    Understanding Your Mortgage

  3. How An Insurance Company Determines ...
    Home & Auto

    How An Insurance Company Determines ...

  4. 4 Steps To Attaining A Mortgage
    Credit & Loans

    4 Steps To Attaining A Mortgage

  5. 10 Hurdles To Closing On A New Home
    Insurance

    10 Hurdles To Closing On A New Home

  6. 6 Good Reasons To Get Renter's Insurance
    Insurance

    6 Good Reasons To Get Renter's Insurance

  7. What's the difference between Social ...
    Retirement

    What's the difference between Social ...

  8. On average, what can I expect my private ...
    Home & Auto

    On average, what can I expect my private ...

  9. Why do I need to pay private mortgage ...
    Home & Auto

    Why do I need to pay private mortgage ...

  10. Want To Sell Life Insurance? Read This ...
    Entrepreneurship

    Want To Sell Life Insurance? Read This ...

comments powered by Disqus
Hot Definitions
  1. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  2. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  3. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  4. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  5. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  6. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
Trading Center