Title Insurance: The Basics


Title insurance is a good idea when it comes to protecting you from potential unknown problems with your title.

When buying a new home in Maryland, you’re likely in the middle of a whirlwind of thoughts and feelings, to-do’s and chaos. There are bound to be a lot of things on your mind as a new or relocated homeowner, and it’s more than likely that title insurance isn’t at the top of that list, or even on it at all.  Title insurance can protect you (or your mortgage lender) from problems related to potential unknown defects in the property title, and it’s entirely possible that it could save the day if something were to go wrong during your title transfer. Here’s a run-down of what exactly title insurance is, and what it can do for you.

What is Title Insurance?

Title insurance is an indemnity policy — one that will offer protection or security from future loss or other financial burden. In the specific case of title insurance, you’re being protected from a lawsuit regarding your property.

What Does Title Insurance Do?

When buying a policy in Maryland, a search is conducted on the property’s title to see if there are any outstanding liens on the property, such as real estate taxes left unpaid by the previous owner, or anything else that might disrupt the owner’s right of ownership, like forgery, fraud, clerical errors, or omissions on previous deeds. These mistakes could incur additional costs to you as the new homeowner, or even invalidate your ownership of the property. Title insurance will protect you against legal fees and potential losses that may result if any of the above problems are found.

Do I Need Title Insurance?

There are actually two types of title insurance — owner’s and lender’s. Owner’s title insurance, as described above, protects the homeowner from losses due to already-existing problems with the title. Lender’s, on the other hand, are often required to be purchased for the lending company by the homeowner, and protects mortgage companies in an amount equal to the loan from the same problems that owner’s insurance concerns.  


While owner’s insurance isn’t required by law in Maryland, it is certainly a good idea. It follows the same logic as any other type of insurance — there’s always a chance for a problem, and it’s better to be safe than sorry. Lender’s insurance, on the other hand, is required by most lending companies as a condition of the loan.


About Colony Title Associates:

Founded in 1995, Colony Title Group handles in excess of 2000 real estate closings in Washington DC and the Delmarva areas every year. The founder Tee Tillman has over 23 years of experience in the title and real estate law fields. Colony handles closings for several lenders, including banks, credit unions and mortgage brokers. Colony is the preferred choice for many real estate brokers in the Baltimore area. If you have any questions concerning what Baltimore title insurance protects you from, feel free to contact us at 410 884-1160 or visit ColonyTitle.com today!


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