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 Rhode Island, title insurance is a form of indemnity insurance that protects the policyholder from financial loss related to defects or legal claims against the title of a piece of real property. When a property is bought or refinanced, a title company typically conducts a title search to uncover any issues with the property's title, such as liens, encumbrances, or defects. If the title company finds any problems, these are usually addressed before the transaction proceeds. Once the title is deemed clear, the title company issues a title insurance policy to the buyer. This policy provides coverage for legal defense against challenges to the property's title and compensates the insured for any covered financial losses. In Rhode Island, title insurance is regulated by the state's Department of Business Regulation, which oversees the licensing of title insurers and agents, and ensures that they comply with state insurance laws and regulations.