Who should typically obtain title insurance?

Title insurance is a crucial component in real estate transactions, primarily because it protects against potential defects in title that may arise after the purchase of a property. It's designed to cover issues such as unpaid taxes, conflicting wills, or fraudulent claims against the title, which could affect ownership rights.

In a typical real estate transaction, the buyer will often obtain title insurance to protect their investment in the property. This policy ensures that if there are issues with the title that arise after the transaction, the buyer is safeguarded against financial loss. On the other hand, lenders also require their own title insurance policy, known as a lender's title policy, to protect their financial interest in the property until the mortgage is paid off. Since the lender has a financial stake in the property until the loan is satisfied, this insurance protects them from any title-related claims that could jeopardize their security interest.

Therefore, it’s standard practice for both the buyer and the lender to obtain title insurance. This dual coverage helps ensure that both parties are financially protected in the event of title disputes, which could arise after the property has changed hands. The inclusion of both interests reflects the interconnected nature of real estate transactions, where safeguarding both the buyer's ownership and the lender’s security interest is paramount.