Title insurance is a required component of most real estate transactions. Unlike traditional insurance (such as auto or health), which protects against future events, title insurance protects against events that occurred in the past that could threaten the legal ownership of the property.
Before issuing a policy, a title company performs a rigorous title search or examination. This investigation involves reviewing public records related to the property, including deeds, mortgages, wills, court records, and tax records.
The process typically culminates in the issuance of a Title Commitment (or Preliminary Report), which states what the policy will cover and lists all exceptions (existing liens or easements) that the new owner will assume.
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