Title insurance protects against defects in a property's ownership history — forged deeds, unknown heirs, unpaid liens. Lenders require their own policy; the optional owner's policy is the one that protects you.
Unlike most insurance, title insurance is a one-time premium covering the past, not the future: problems that already exist in the chain of title but surface later. There are two policies at closing. The lender's policy is required by your mortgage company and protects only the lender. The owner's policy — optional in most states, and the one buyers actually decide on — protects your equity against covered title defects for as long as you own the home. Skipping it saves a few hundred to a couple thousand dollars once; a surfaced lien or ownership claim without it can cost the house.
Yes. Their policy doesn't transfer to you, and it doesn't cover anything that happened during their ownership — including liens they created.
Standard policies often exclude survey matters; enhanced policies and a new survey close much of that gap. Check the exceptions page, not the brochure.
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