What Title Insurance Protects Against
Title insurance protects homeowners against financial loss from defects in the title to real property that existed before the policy was issued but were not found in the title search. Owner's title insurance is a one-time premium paid at closing that provides coverage for as long as you own the property. Despite being purchased at closing, title insurance is one of the most valuable protections a homeowner has—because title defects can surface decades after purchase.
Covered title defects include: forgery or fraud in prior ownership documents; undisclosed heirs who claim ownership; errors in public records; undisclosed prior mortgages, liens, or judgments; easements that affect use of the property; survey errors showing boundary discrepancies; and zoning violations or restrictions not found in the title search. The value of title insurance is that the title company defends your ownership rights and covers losses—you don't pay out of pocket.
Common Scenarios That Trigger Title Claims
Real-world title claims arise in several patterns: a prior deed in the chain of title turns out to have been forged; a probate was not completed correctly and an heir of a prior owner surfaces with a legal claim; a contractor filed a mechanic's lien before closing that was missed in the search; a prior owner failed to disclose a judgment lien; or survey work reveals the property line is in a different location than represented, affecting improvements already built. Older properties with multiple prior owners and properties that were transferred through estates carry the highest title risk.
How to File a Title Insurance Claim
Notify your title insurance company as soon as you become aware of a potential title defect or adverse claim. Most policies require prompt written notice—delay can result in denial if the title company is prejudiced by the late notice. Provide all documents related to the adverse claim: the competing deed or judgment, any court filings, demand letters, and anything else you received from the claimant. The title company assigns a title attorney who will defend your ownership rights or negotiate resolution.
When Title Companies Deny Claims
Title companies deny claims on grounds including: the defect was listed as an exception in the policy (reviewing Schedule B of your title policy reveals listed exceptions); the policy lapse or coverage didn't include the specific type of defect; the policyholder's own actions created the title problem; or the loss is not attributable to a covered title defect. If your claim is denied, get a second opinion from an independent real estate attorney—some title claim denials are challengeable under the policy terms and state insurance law.
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Frequently asked questions
What is the difference between owner's and lender's title insurance?
Lender's title insurance (required by your mortgage lender) protects the lender up to the mortgage balance if a title defect surfaces. Owner's title insurance (optional but strongly recommended) protects you for the full value of the property. They are separate policies. Lender's title insurance does not protect the buyer—you need your own owner's policy.
What is an ALTA policy versus a standard title policy?
ALTA policies (American Land Title Association) are broader than basic title policies and may include coverages for survey issues, zoning violations, building permit problems, and other post-policy-date risks not covered by standard policies. ALTA homeowner's policies are available at closing and are worth the modest additional premium for most buyers, particularly those purchasing older homes with complex histories.
Can I file a title insurance claim years after closing?
Yes. Owner's title insurance has no expiration date while you own the property. A title defect that surfaces 15 years after purchase is still covered by the owner's policy you purchased at closing. The one requirement is prompt notice once you become aware of the adverse claim—most policies require notice "as soon as practicable" or within a specific period of discovery.