• Lender or mortgagee protection
• Owner's coverage

Most lenders require mortgagee title insurance as security for their investment in real estate, just as they may call for fire insurance and other types of coverage as investor protection.

An owner’s policy lasts as long as you, the policyholder - or your heirs - have an interest in the insured property. This may even be after you have sold the property.

An important part of title insurance is its emphasis on risk elimination before insuring. This gives you, as the policyholder, the best possible chance for avoiding title claim and loss. The title company will start with an examination of public records to report all "material objections" to the title. Frequently, documents that don't clearly transfer title are found in the "chain," or history that is assembled from the records in a search. Here are some examples of documents that can present concerns:

• Deeds, wills and trusts that contain improper wording or incorrect names;
• Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes;
• Easements that allow construction of a road or utility line;
• Pending legal action against the property that could affect a purchaser; or
• Incorrect notary acknowledgements.

Despite every effort to find problems with the title prior to closing escrow, some hidden hazards can emerge after closing, resulting in unpleasant and costly surprises. Some examples of hazards include:

• A forged signature on the deed, which would mean no transfer of ownership to you;
• An unknown heir of a previous owner who is claiming ownership of the property;
• Instruments executed under an expired or a fabricated power of attorney;
• Mistakes in the public records;
• Deeds by persons of unsound mind;
• Deeds by minors;
• Deeds by persons supposedly single, but in fact married; or
• Liens for unpaid estate, inheritance, income or gift taxes.

Title insurance will pay for defending against any lawsuit attacking the title as insured, and will either clear up title problems or pay the insured's losses. For a one-time premium, an owner's real estate title insurance policy remains in effect as long as the insured, or the insured's heirs, retain an interest in the property.