Title insurance terms and lingo can be extremely confusing. Especially for first time or more inexperienced home buyers.
Title: is the document that proves that an individual legally owns a specific property.
Escrow: is the period of time where a third party (such as a title company) holds the funds for the home sale until the transaction is ready to be completed.
Title search: is conducted during escrow to find mishaps or mistakes in past titles/documents for the property.
Lien: can be put against the property if a previous owner individual owes money to someone else, that person (the lienholder) can become the owner of the debtor’s property until the debt is paid.
You can think of title insurance like other types of insurance, with this exception: title insurance protects you from events or occurrences that happened in the past, instead of events or occurrences that might happen in the future. Whereas your homeowners insurance would cover loss that may occur from floods or fire, title insurance protects your rights to ownership from mishaps in past titles on the home. This could be as a result of liens, improperly filed paperwork, or many other things.