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 Utah, 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 Utah Insurance Code, specifically Title 31A, governs the regulation of title insurance, and the Utah Insurance Department oversees the licensing and regulation of title insurance companies. Title insurance policies in Utah are typically issued after a thorough title search has been conducted by the title company to uncover any potential title issues such as liens, encumbrances, or legal claims. 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 closing and is a common requirement by mortgage lenders to protect their interest in the property. Buyers may also purchase an owner's title insurance policy to protect their equity in the property.