In transactional real estate land, title insurance is one of the most misunderstood products by lawyers and non-lawyers alike. Yet it needn’t be…if you understand what car/homeowners insurance does there’s no reason you shouldn’t have a basic understanding of what title insurance does. And this recently reported First District Rhone v. First American, No. 1-09-1216 case provides a nice back-drop for a rich and thorough title insurance discussion.You really just need to understand a couple things and you’ll “get” title insurance just like you “get” car insurance. Every insurance policy will have some “effective date.” The confusing issue with title insurance is that whereas a car insurance policy would cover damage the day AFTER the policy’s “effective date” with title insurance, the policy would cover damage the day BEFORE the “effective date.” Title insurance looks backward whereas the car insurance looks forward. Okay?
via The Secret of Title Insurance.