Title insurance is insurance against loss from defects in title to real estate and unenforceability of mortgage liens. It is available throughout the United States. It is meant to protect an owner's or lender's financial interest in real estate against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.

Typically the real estate interests insured are fee simple ownership or a mortgage. However, title insurance can be purchased to insure any interest in real estate, including an easement, lease or life estate. Almost all institutional mortgage companies require title insurance to protect their interest in the collateral of loans secured by real estate. Some mortgage lenders, especially non-institutional lenders, may not require title insurance.

There are two types of title insurance: Lenders title insurance, also known as a Loan Policy, and Owner's title insurance known as an owner's policy. Most lenders require a Loan Policy when they issue you a mortgage home loan when purchasing real estate. The Loan Policy is based on the dollar amount of your loan. It protects the lender's interests in the real estate should a problem with the title arise.

Owner's title insurance is normally issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts as long as you or your heirs own the real estate. The Owner's title insurance fully protects the buyer should a problem arise with the title that was not uncovered during the title search. Owner's title insurance also pays for any legal fees involved in defending a claim to your title. Prices, and the way title insurance is issued, vary from state to state. Contact a title company in your state to see how it is handled.