You have found a house you like; your offer has been accepted and escrow has been opened at a title company. Soon after escrow is opened, your escrow officer sends you a document entitled Commitment for Title Insurance. At this point you need to understand what title insurance is and why it is so important.

There are two types of title insurance: owner’s coverage and lender’s protection.

Owner’s title insurance ordinarily is issued in the amount of the real estate purchase and lasts as long as you have ownership in the property.

Most lenders require mortgage title insurance as security for their investment in real estate, just as they will require fire insurance and other types of coverage as investor protection. Lenders protection is insurance that decreases and eventually disappears as the loan is paid off.

An important part of title insurance is its emphasis on risk elimination before issuing the policy. This means the insured has the best possible chance for avoiding title claim and loss.