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Title insurance is a policy that protects homebuyers and lenders against financial losses arising from defects in a property's title, such as errors in public records, undisclosed liens, fraud, or competing ownership claims. Unlike other types of insurance that protect against future events, title insurance covers issues from the past that weren't discovered during the title search.
There are two types: lender's title insurance, which is typically required by the mortgage lender, and owner's title insurance, which is optional but strongly recommended. You pay a one-time premium at closing, and the policy remains in effect for as long as you own the home. Title issues are rare but can be costly and legally complex, making title insurance a valuable protection.
