Abraham Lincoln lost his home twice due to problems with the title. The purpose of title insurance is to help you avoid the same fate. Simply put, it insures you and your lender against errors or potential problems with the ownership documents of your home. For example, if someone was to claim to be the rightful owner of your home, the title insurance protects you against possible loss or damages.

Two types of title insurance are available. The lender’s policy protects only the lender from title defects, liens or judgments. The owner’s policy protects the buyer against the same problems, and can be expanded to cover additional title risks, such as unrecorded liens. A lender’s policy is required in order to obtain a mortgage. An owner’s
policy is not, but since it’s only slightly more expensive than the lender policy, buying it is certainly not a bad idea as it gives you added peace of mind.

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