Title insurance is a form of insurance in which the insurer agrees to indemnify the insured party for
any loss suffered that results from a defect in the title to the property that was unknown to the buyer at the time of the sale. A title policy of insurance insures the homebuyer against any
encumbrances that may affect the title to their property. The policy is required by most institutional
lenders in order to get a mortgage and will pay the value of the mortgage in the event that there is a
defect in the title that voids the buyer’s title to the property. It is an alternative to getting a municipal
compliance certificate or real property report.