Trust Escrow: Why Title Insurance Matters

by Carson BuckFebruary 8, 2017

What Every Homebuyer Should Know About Escrow

Title insurance, as a concept, is not nearly as well understood by most prospective homebuyers and current homeowners as the other types of insurance that protect them. That doesn’t make it any less important, however. Title insurance allows the homeowner the ability to relax, regarding several dangers that they may not even realize they are exposed to without it.

We’ll get into what those dangers are in a moment, but rest assured you pay for title insurance for not just one, but many good reasons. According to an article on the NuWire Investor website, as many as 26% of all properties in the United States have some sort of title issue.

What many homeowners struggle to understand is that when you purchase a piece of property, or a home built on a piece of property, what you’re really buying is the title to that property, not the property itself. Titles, like any other legal document, can have inherent issues and title insurance protects you against any issues regarding your title for a one-time payment.

This, according to the handy “Your Guide to the Real Estate Transaction” published by Stewart, differentiates title insurance, because it’s not something you purchase in anticipation of future problems, but instead, to insure the history of your title and that it grants you what it says it does in regards to your property.
title insurance and escrow

Two Types of Title Insurance

There are two types of title insurance. One is required by lenders when a home is purchased on credit, and another is available to homeowners who own the title to their property outright.
Lenders require buyers purchasing title to properties with credit to carry title insurance in order to protect their interest in the property while the homeowner is paying off their loan. Title insurance for homeowners in possession of their title is still recommended, however, as problems with title to property are not limited to properties purchased with credit and may not come into focus until a property is being sold to the next buyer.
title insurance and escrow

Title Insurance Protections

According to a handy list published on the American Family Insurance website, there are at least twenty problems that can affect those 26% of properties that suffer from title issues. These can include everything from forgery of deeds and other legal documents associated with the property, to the signing of deeds challenged due to mental incapacity, illness, imprisonment, unfinalized divorces, and many other problems stemming from the nature of the property to the actions or inaction of prior owners.
title insurance and escrow

Title Insurance: The Most Important Component of Escrow?

Many real estate experts will tell you that title insurance is, hands down, the most important aspect or component of the escrow process. Whether you are purchasing title insurance because your lender requires it, or are considering its purchase to protect your title to property owned outright, do not ignore its importance, and everything it can protect you from. is the place to dream and discover your ideal home! Are you starting to get the itch to look for your first or next home, but don’t know where to start? You’ve come to the right place! Browse our real estate and lifestyle blog for home buying tips, mortgage guides, DIY ideas, interior design, lifestyle topics, general home inspiration, or just some homes fun. We are sure you can scratch that itch and find all the information and tools you need to help in your home search. Want to start looking at available real estate right now? Head to our home page and check out homes for sale or rent listings all over the country. Happy house hunting!

About The Author
Carson Buck
Carson is a real estate agent based out of the Phoenix area. In this day and age of online research, Carson loves interpreting data and market research in order to make sure his clients have the best possible chance of finding and successfully buying the home they love. He is passionate about seeing that the buying process is as smooth as possible, and claims that there is no better feeling than handing over the keys to a new home.

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