Title Insurance By ADAM HAYES Updated May 26, 2020 What Is Title Insurance? Title insurance is a form of indemnity insurance that protects lenders and homebuyers from financial loss sustained from defects in a title to a property. The most common type of title insurance is lender's title insurance, which the borrower purchases to protect the lender. The other type is owner's title insurance, which is often paid for by the seller to protect the buyer's equity in the property. KEY TAKEAWAYS Title insurance protects lenders and buyers from financial loss due to defects in a title to a property. The most common claims filed against a title are back taxes, liens, and conflicting wills. A one-time fee paid for title insurance covers pricey administrative fees for deep searches of title data to protect against claims for past occurrences. How Title Insurance Works A clear title is necessary for any real estate transaction. Title companies must do a search on every title i