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 Arizona, title insurance is a contractual arrangement that protects real estate buyers and lenders from financial loss due to defects in a property's title. The title insurance policy ensures that the title to the property is free and clear of any liens, encumbrances, or defects, such as unpaid taxes, easements, or previous undisclosed heirs. When a property is purchased, a title company typically conducts a title search to uncover any potential issues with the title. If the title is deemed insurable, the title company issues a title insurance policy to the buyer. This policy provides coverage for legal defense against claims challenging the title and compensates the policyholder for any covered losses. In Arizona, title insurance is regulated by the Arizona Department of Insurance, which oversees the licensing of title insurance agents and companies, and ensures that they comply with state statutes and regulations. It's important for buyers to understand the terms of their title insurance policy, as coverage can vary. An attorney can provide guidance on the implications of title insurance and assist in resolving any title issues that may arise.