What type of insurance protects against defects in the title of real estate?

Title insurance is specifically designed to protect against defects or issues that may arise with the title of a property. When a person purchases real estate, they acquire the rights to that property, which includes the title. Title insurance safeguards the buyer and lender from any claims or legal disputes that may exist due to previous owners or liens on the property, ensuring that the purchaser has a clear ownership stake.

This type of insurance provides coverage for defects such as undisclosed heirs, fraud, or errors in public records that could affect the ownership rights of the property. It is generally required during the closing process of a real estate transaction to ensure that the buyer is protected from any title issues that might surface after the purchase.

In contrast, property insurance typically covers physical damage to the structure or contents of a home from events like fire or theft, liability insurance protects against claims of injury or damage caused by the policyholder, and homeowners insurance encompasses both property insurance and liability coverage but does not specifically address issues related to title defects.