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Q.Is Title Insurance Really Necessary?
A.Although not required by law, most lenders do require the buyer to purchase a title insurance policy to protect the lender against any title problems. Regardless, a title insurance policy is typically a good thing to procure. Title insurance serves to secure a buyer's claim to the property and to protect the buyer against title "defects" (e.g. liens, encumbrances, and other legal rights to the property that existed but were unknown when the title policy was issued and later discovered). If a buyer procures a title insurance policy and either a claim is made against the property or a defect in the title is later discovered, the title insurer will take care of the claim and pays the property owner, up to value of the policy, for any actual loss in value suffered as a consequence of the title defect.
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