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 Colorado, title insurance is a contractual arrangement that protects buyers and lenders from financial loss due to defects in a property's title. The title insurance policy ensures that the policyholder has a clear title to the property, free from any legal claims such as liens, encumbrances, or defects in the public records. It also covers the cost of legal defense against challenges to the property's title. Title insurance is typically issued after a title company has conducted a thorough search of public records to identify any issues with the title that need to be resolved before the transaction can proceed. The Colorado Division of Insurance regulates the title insurance industry, ensuring that title insurers comply with state statutes and regulations. It's important for buyers to understand that title insurance is different from home insurance and other forms of property insurance, as it covers past issues with the title rather than future risks.