Title insurance insures, defends, indemnifies, and protects the policyholder against claims or losses arising from a defect or claim against the title to real property. Title insurance is usually issued to the buyer of real property by the title company that conducted the title search.
In California, title insurance is a form of indemnity insurance that protects the holder from financial loss due to defects in a title to a property. The California Insurance Code regulates the title insurance industry, and the California Department of Insurance oversees the issuance and enforcement of these regulations. Title insurance policies in California are typically issued after a thorough title search of public records to ensure the validity of the property's title. The policy provides coverage for legal defense against claims and pays for any covered financial losses up to the amount of the policy. It is a one-time fee paid at the closing of the real estate transaction. Title insurance is not mandatory in California, but it is commonly purchased to protect against potential title issues such as liens, encumbrances, or fraud.