If you’re taking out a loan to buy a new home, your lender may require that you purchase title insurance. This type of coverage is not the same as homeowners, which protects against potential damage that might affect your property in the future. Rather, it protects you from liability for unknown issues from the past — problems that existed before you closed on the house. Here’s a brief guide to the basics of this type of policy.

What Is Title Insurance?

Title insurance protects against property loss and/or financial damage that can occur as a result of defects in a title. Defects can include things like forged documents, unknown heirs, public record errors, illegal deeds, and boundary disputes. Both the buyer and lender are covered by title insurance, and most lending institutions will require you to purchase it to obtain your loan.

Why Is Title Insurance Necessary?

Without title insurance, you can be held responsible for title defects, even though you didn’t know of their existence when you closed on the property. For example, if a lien uncovers the previous owners owed back taxes on your home, title insurance will protect you from having to cover these costs.

Also, when you purchase title insurance, your provider will search all public records for any claims on your property. After you’ve closed, if someone does claim ownership by citing fraud, human error, or another kind of title defect, your insurance will cover the financial loses you may experience as a result.

If you have questions about title insurance and need a real estate attorney to help you close on your home, contact the experienced professionals at Allen L. Lacy Jr. Attorney at Law. With nearly 30 years of practice experience, the Commerce, GA-based legal team can help you successfully navigate both general practice and real estate law issues, including title services and refinancing. Visit their website to learn more about their areas of expertise, or call (706) 335-7886 to speak with a lawyer today.