Have you ever heard of anyone collecting title insurance? Perhaps none; yet if you are going to buy a home or refinance a mortgage, a title insurance gets the largest chunk in the itemized estimate for closing costs and fees. Though most home buyers and refinancers don’t bother to question this anymore because of the tiresome process of asking and shopping for better insurance providers, the recent buzz on foreclosure freezing by some banks and mortgage providers bring to light the immense importance of title insurance.

A title insurance is supposed to cover a home buyer from cases wherein other people turn up after the house has been bought and claims rights to the house. Title insurance providers run a title search and sift through government filings related to the property prior to it being bought to lower the chances of insurance being claimed later on. But if the insurers miss something and someone else do turn up later on, insurers would have to provide legal counsel or settle with whoever is claiming.

Sounds like title insurers are indeed champions of home buyers and refinancers, right? Not really; the truth is, they are more concerned about lenders, real estate agents, and lawyers who can give them more business. Though kicking back money from companies and brokers who send insurers business is technically not allowed, there’s nothing much everybody can do since title insurance is required if there’s mortgage involved.