Title insurance is an insurance policy or contract issued by a title company.
It protects you, the purchaser or owner, against a loss that may arise by reason of a defect in your ownership or interest you have in real property. In addition, the title insurance company agrees to defend you in court if there is an attack on your title. It will cover attorney and court expenses or pay a loss caused by the defect in title up to the face amount of the policy subject to the terms listed in your policy. Since most property owners mortgage or borrow money at the time of purchase or during ownership, the lender can be expected to request protection of its investment against loss. Lenders know that many things can cause loss of title or that expenses are incurred while defending an attack.