Title insurance is an insurance product that protects an insured owner (or lender) against various adverse claims, encumbrances, and defects against title to real property.
When a title insurance company receives a request for title insurance, we examine the title history to the property in question and issue a title commitment that reflects the title’s current status. This commitment displays who owns the property, any taxes and assessments due, unpaid mortgages, liens, easements, covenants, and any other matters that may indicate someone other than the owner has rights to all or part of the real estate under search.
When our commitment is issued, the seller and purchaser (or lender) agree upon which items can remain on the title and which should be eliminated. Once title is acceptable to the purchaser and/or lender, the transaction is closed and we issue our policy showing the condition of the title at the time of closing.
Unlike automobile or life insurance, title insurance is a one-time fee paid at closing of the transaction. In the Puget Sound Region, unless agreed upon otherwise in your purchase and sale agreement, typically the seller purchases the buyer’s title insurance policy. The buyer pays for a policy of title insurance for the lender (if any).