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Title insurance is, simply put, indemnity insurance that protects its purchaser from any defects in a title to real property, or real estate, and from mortgage loans that become invalid or unenforceable. An indemnity is an amount of money, which paid from one party to another as a way to compensate one of the two parties for a financial loss. This is paid by one of the parties, even if they are not responsible for whatever loss has taken place. An indemnity can be paid in many forms, including cash payments, replacement, reinstatement, and repairs. Essentially, when an indemnity is paid it is a compensation for a loss of some sort. The goal of title insurance, then, is to protect the owner of real estate from any loss which takes place due to issues with the ownership of the property, any liens placed against the property, and many other issues. Interestingly enough, it is mainly sold in the United States. This is because land record laws in the United States are generally seen as insufficient to protect the interests of owners and lenders from loss due to liens, title problems or other issues. What it does, specifically, is protect owners or lenders from any lawsuits that attack the title or compensate the insured party for any financial losses. These policies will specify a dollar amount for which they compensate owners or lenders for any losses. Two types of title insurance policies exist - owner and lender. Nearly all lenders require this type of policy when one purchases a piece of real estate, however, some lenders do not. These can include non-institutional lenders. Many buyers who purchase pieces of real estate with cash or through a mortgage lender will often purchase these policies for their own piece of mind. This is because insuring a loan does not provide any coverage for the buyer if a loss were to take place, so many buyers purchase this type of policy of their own volition. Why do you need title insurance as a homeowner? You probably already have a policy that protects your home from any physical damage so it may not seem necessary to purchase this type of policy to protect your investment. The reality is that you as a purchaser of a piece of real estate can have issues with the title of the property which can prevent you from fully utilizing and enjoying your investment and which can cause significant financial issues. Purchasing this type of policy can protect you from someone coming forward and claiming that they were supposed to inherit your property. It will provide you with legal and financial resources to protect yourself from claims like these. For title insurance, Michigan property buyers rely on Liberty Title. Learn more by visiting http://www.libertytitle.com.
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