14 Southeast Transaction Guide § 265.03

Summary

• [1] Methods of Title Protection
  • [a] Title Policies and Guaranties
    • [i] Title Insurance.

      A policy of title insurance is an indemnity contract whereby a title insurance company promises to indemnify the owner, mortgagee, lessee, or others having an interest in property described therein against damages due to defects, liens, or encumbrances which exist at the time the policy is written, except such defects as are set forth in the policy. The title insurance company becomes obligated to pay, up to the limits of the policy, any insured loss suffered by the insured because of defects or encumbrances affecting the title to the real estate and, in addition, must defend the title at its own expense against any claims or demands alleged to exist at the date of the policy. The insured owner is also protected when he conveys the property with a warranty and his grantee sues him alleging a defect in title.

      There are two basic types of owner’s or fee title insurance policies: a “defeasance policy” and a ...