Title Insurance insures against financial loss caused by defects in title to real estate. Title insurance companies defend against lawsuits attacking the title, or in the case of a covered loss, reimburses the insured up to the policy limit.
Title Insurance protects from claims of ownership by other parties. It protects the buyer against covered losses from problems that arose before the purchase of the property. If there is a claim against the property and it is determined to be a covered loss, the insurance company will defend the insured/buyer in court and will pay for covered losses.
Examples of Title Defects
- Invalid documents due to forgery, fraud, undue influence, duress, incompetency, incapacity, or impersonation
- A document affecting ownership that is not properly executed, signed, witnessed, notarized, or delivered
- Undisclosed or unrecorded easements through the property
- No right of access to and from the property
- A document not properly recorded in the public records
- Ownership claims by undisclosed or missing heirs
- A previous owner fails to pay a mortgage, tax assessment, or association dues
- Liens or claims not listed in the policy that may exist against the property title
Types of Title Insurance Policies
- Owner’s Policy – Protects the property owner against losses from ownership problems that arose before the purchase of the property and were not known at the time of the purchase. These policies typically last as long as the owner or their heirs own the land and may last forever for any title warranties made when the owner sells the property.
- Lender’s Policy – Protects the lender’s interest in the property against losses from ownership problems that arose before they loaned money on the property. These policies remain in effect until the loan is repaid.
Title Insurance is not required in the state of Idaho. However, your lender may require you to purchase a Title Insurance Lender’s Policy to protect their interests.
Have more questions?
Contact the DOI Title Insurance Specialist