A home owner’s title insurance policy insures against the risk that the title to their land is other than that exactly stated in the title insurance policy.
Usually, to transfer a property in the United States, a deed is required to be signed sealed and delivered, and lodged with the local recording authority.

A deed is a particular document that signifies the solemnity of the party’s agreement, to an extent that transcends that of an ordinary agreement or contract. The process of signing, sealing and delivering a deed is an ancient one that harks back to the times of when people placed their ‘seal’ on a document by impressing a ring or other emblem into a pool of hot wax at the bottom of the particular parchment. Today however, the convention is to merely sign a document ‘as a deed’ to invoke the particular reverence that the law places upon them.

A simple contract for example, can be found to be void for any number of reasons, the least of which may be that a misunderstanding took place between the parties to it. A deed however is enforceable strictly against the parties and carries with it an authority tantamount to the law itself.

Still the conundrum may present itself where there exists conflicting deeds for the same property, or deeds that are devoid of some essential fact or element that infringes on the truth, a factual situation or the interests and rights of an individual.

Largest Investment of Your life

Residential title insurance is important for many reasons, most of which have to do with the fact that for most people, their home is the single largest investment they make in their life, and is the essence of their financial freedom or security thereof.

Considering the relatively small cost of homeowners title insurance, it seems to be foolhardy to risk the burden of a claim on a property previously considered your own, from people you are unacquainted with, alleging unknown causes of action, that altogether jeopardize the safety that your home represents and that invade the sanctity of your personal property rights.

Title insurance for the home has rapidly expanded to cover more than merely defects in the title, but to also cover any contingency that may present itself to prevent the owner’s enjoyment of the land. Another attribute of home property title insurance is that unlike the regular premiums of other insurance policies, home title insurance requires only one premium payment paid at the onset of the policy, with the cover extending toward the homeowners for as long as the homeowner is able to suffer a detriment in regard to that property.

Alleviating risk is what is at the heart of home owner’s title insurance. Transferring the risk to another individual who is prepared to carry it in return for a premium is the perfect title insurance for land. In America this service is utilized in 85% of property transactions.

Surely the efficiency of the title transfer process is assisted by these types of house title insurance, as the individual offering what is deemed to be title insurance on a house is actually indemnifying the policy holder against many contingent risks that can arise from the registration for a title to property, and thereby relieving the homeowner from the tedious and uncertain process of legitimizing a title and defending their title should a challenge present itself.

Resources:

http://homebuying.about.com/od/homeshopping/qt/TitleInsurance.htm

http://www.firstam.com/fatic/html/cust/1200.html

http://title-insurance.nationalrelocation.com/owners-policy/