Basically your Owner’s Title Insurance Policy protects you from covered losses for as long as you or your heirs own an interest in the property or are obligated under Warranties of Title you have given for that property. The period of time covered ends with the effective date of the policy which brings to light one of the basic differences between title insurance and most other forms of insurance. That is title insurance covers against events which happened in the past as opposed to casualty insurance which insures against losses suffered due to future events.
Run that by me again.
Let’s say you buy auto insurance last week and a tree falls on your car this week. The effective date of the policy was from last week forward and the tree fell this week during the period covered. Bingo, you have coverage.
Generally, a title policy covers events which occurred at or prior to your effective date but which do not become apparent until after the effective date. For instance, you buy a home and an owner’s title insurance policy last week. This week a lady claiming to be the previous seller’s wife appears at your door wondering why you’re living in her house. It turns out the wife at closing who signed your deed was the seller’s girlfriend and forged the real wife’s name. Assuming you weren’t in on it, Bingo, you are covered because the claimed interest arose prior to your effective date (the real wife never signed the deed) and you still hold title.