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 Virginia, 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 Virginia Bureau of Insurance, which is part of the State Corporation Commission, regulates the title insurance industry. Title insurance policies in Virginia cover potential financial loss from issues such as liens, encumbrances, or defects in the title that were not discovered during the title search prior to the purchase. It is typically a one-time fee paid at closing and is not mandatory, but it is highly recommended as it provides protection against claims that may arise after the property has been purchased. The title insurance company is obligated to defend the policyholder in court against claims on the title and to indemnify them for covered losses.