How Title Insurance Differs From Other Kinds of Insurance?
The function of most forms of insurance is risk assumption, that is, to provide financial indemnity of losses arising out of an unforeseen future event (such as death or accident). However, the primary purpose of title insurance is to eliminate risks and prevent losses caused by defects in title arising out of events which have happened in the past. A basic function of the title insurance company is to take steps to minimize risk for the policyholders and safeguard their interests in the property. If title problems arise in spite of this preventive work, title insurance will pay for the cost of defending the title as insured.
