• Title insurance is indemnity insurance that protects the holder from financial loss sustained from defects in a title to a property.   The property owner will receive an Owner's Title Insurance Policy and lenders will receive Mortgagee Title Insurance Policies, if applicable, upon closing of your transaction.   

• Title insurance protects both real estate owners and lenders against loss or damage occurring from liens, encumbrances, or defects in the title or actual ownership of a property.  Unlike traditional insurance, which protects against future events, title insurance protects against claims for past occurrences.  Such claims include property ownership by another person, fraud or forgery of the title documents, unidentified easements, outstanding lawsuits, liens against the property, etc. 

• There are two types of title insurance: lender's insurance and owner's insurance.  Almost all lenders require the borrower to purchase a lender's title insurance policy to protect the lender against any possible future loss. An issued policy signifies the completion of a title search, offering some assurance to the buyer. 

• Since title searches are not infallible and the owner remains at risk of loss, there is a need for additional protection in the form of an owner's title insurance policy.  Owner's title insurance, which is purchased to protect the buyer against defects in the title, is optional but encouraged.

• Often, a lender's policy and an owner's policy are required together to guarantee all parties to the transaction are adequately protected. Title insurance is purchased at the time of closing for a one-time fee. 

Fidelity National Title Insurance Company; retrieved from http://www.fntic.com/21reasons.aspx

1. A fire destroys only the house and improvements. The ground is left. A defective title may take away not the only the house but also the land on which it stands. Title insurance protects you (as specified in the policy) against such loss.
2. A deed or mortgage in the chain of title may be a forgery.
3. A deed or a mortgage may have been signed by a person under age.
4. A deed or a mortgage may have been made by an insane person or one otherwise incompetent.
5. A deed or a mortgage may have been made under a power of attorney after its termination and would, therefore, be void.
6. A deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner.
7. The testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.
8. A deed or mortgage may have been procured by fraud or duress.
9. Title transferred by an heir may be subject to a federal estate tax lien.
10. An heir or other person presumed dead may appear and recover the property or an interest therein.
11. A judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.
12. Title insurance covers attorneys’ fees and court costs.
13. Title insurance helps speed negotiations when you’re ready to sell or obtain a loan.
14. By insuring the title, you can eliminate delays and technicalities when passing your title on to someone else.
15. Title insurance reimburses you for the amount of your covered losses.
16. A deed or mortgage may be voidable because it was signed while the grantor was in bankruptcy.
17. Each title insurance policy we write is paid up, in full, by the first premium for as long as you or your heirs own the property.
18. There may be a defect in the recording of a document upon which your title is dependent.
19. Claims constantly arise due to marital status and validity of divorces. Only title insurance protects against claims made by non-existent or divorced "wives" or "husbands."
20. Many lawyers, in giving an opinion on a title, protect their clients as well as themselves, by procuring title insurance.
21. Over the last 24 years, claims have risen dramatically. That is why it's important to choose a trusted title company specializing in escrow services and Florida real estate closings.