If you are in the market for a new home or other real property purchase, you've probably been told you should buy title insurance. However, if this is your first house purchase, you may not know what it is or why you need it. To bring you up to speed on the subject, below is an introduction to title insurance and an explanation of why it's so important.

What Is Title Insurance?

Unlike traditional insurance, which protects policyholders against possible future occurrences, title insurance protects against possible challenges to your ownership rights for issues that have already happened but perhaps have not yet been revealed. For instance, it guards against defects in the title caused by forged deeds or mortgages, deeds transferred by a mentally incompetent individual, deeds executed under false power of attorney, deeds transferred without disclosing a divorce, or errors in the address, appraisal amount, or description of the property.

Why Is Title Insurance Important?

Many homes have a long history of ownership, and if any of the above errors—or numerous others—should have occurred at some point in the past, it could affect your property rights. For instance, if the home had been sold under false pretenses 30 years ago, the actual owner—or their heirs—could still have a claim to ownership, even if you have just purchased the home and were unaware of the issue. Title insurance first requires a thorough title search to unearth potential problems or conflicts—called "defects of title"—and it will thereafter reimburse you for any losses you sustain due to undiscovered defects that existed prior to your policy issue date.

As of 2018, the median value of a house in Florida was nearly $295,000. Add to that the cost of legal fees defending your rights to the home, and you could suffer catastrophic losses. Title insurance guards you against those costs.

If you are in the process of purchasing a house or other property, contact Scarab Title & Escrow Services, a trusted real estate title company in New Port Richey, FL, for title insurance. They serve clients throughout the greater Tampa area and bring more than a decade of experience to the table. Visit their website to see answers to frequently asked questions about title insurance or call (727) 378-4553 to arrange a consultation.