What type of insurance is typically required during the closing process of a property purchase?

Title insurance is a type of insurance that is typically required during the closing process of a property purchase. This insurance protects both the buyer and the lender from any potential disputes or claims that may arise regarding the ownership of the property after the purchase is complete. It covers issues such as fraud, unpaid liens, or other defects that may not have been discovered during the title search prior to closing.

Having title insurance ensures that if any problems regarding ownership come up after the sale, the insurance company will defend the buyer's title to the property or compensate them for any financial loss. This peace of mind is crucial for all parties involved, particularly the buyer who is making a significant investment. Other forms of insurance like homeowner's or liability insurance, while important, do not provide the same protection in relation to ownership disputes, making title insurance a fundamental requirement in real estate transactions.