Real Estate

What is Title Insurance?

What is Title Insurance?

What is title insurance?

Shielding against financial loss when defects are found in a property title, title insurance can also provide evidence of lawful ownership of property.  It is extremely common for real estate transactions (more than half!) to find issues somewhere along the chain of title, so title insurance is beneficial because it helps expose any underlying issues before you make a purchase of property, so you are able to address and correct these problems and the transaction can go through.


Title insurance protects real estate owners and lenders when property loss or damage take place due to defects in the title to the property, encumbrances or liens.  There are specific terms, conditions and exclusions within every title insurance policy.


Purchasing a home is typically the largest investment made by most people, and title insurance is there to help protect that investment.  Although the majority of insurance types (such as flood, auto or homeowners insurance) cover a policyholder for possible future events, title insurance shields against losses that can occur due to defects and hazards that already exist in the property title.  Some examples of these defects could be a lien against a previous owner, or improperly executed documents from a prior sale.

Protection from the past

Most insurance policies such as car, life, health, etc. protect you from possible future events, and they are paid with premiums that are due monthly or annually.  In contrast, title insurance safeguards a real estate purchase from prior events that have occurred with the property and its previous owners, and the premium is paid just once when escrow closes.

Good for all

Title insurance defends against claims from defects such as fraud, forgery, easements, encroachments, liens, another person claiming an ownership interest, improperly recorded documents and other items as described in the insurance policy.  Both lenders and purchasers need title insurance if they wish to be protected from possible title defects.  Title insurance is beneficial to those involved in the process, including the buyer, seller and lender.   

Title insurance procedures

Following the title order being opened by the escrow officer or lender, a title search can be coordinated by the attorney or title agent.  After the preliminary report is completed, the customer will be able to examine and approve it.  Once escrow has made the request, all closing documents are recorded.  The actual title insurance policy is established after recording has been confirmed, orders are paid and funds are paid out.

Escrow is a process that occurs when the funds for a transaction (such as a house being sold) are retained by a third party, often an attorney or title company when speaking of real estate, and released only when the transaction has been fulfilled as promised.

Still need help? Why not give us a call on our toll free number so we can help guide you through the process of buying real estate in Puerto Vallarta: 1 844 598 3564