What is the purpose of a commitment in title insurance?

The purpose of a commitment in title insurance is to issue a policy. A title commitment serves as a preliminary report provided by the title insurance company that outlines the terms and conditions under which the company will issue a title insurance policy. It details what the company will cover and identifies any exceptions to coverage, pending requirements that must be fulfilled before the policy is issued, and other relevant information regarding the property title.

This commitment is essential for buyers and lenders as it establishes expectations and clarifies any issues that might need resolution prior to the closing process. The commitment essentially outlines the company's commitment to insure the title, meeting the specific requirements that are in place to protect against any future claims or disputes over ownership.

While property tax summaries, market value determinations, and the responsibilities of insurance agents are all important aspects of real estate transactions, they do not define the primary purpose of a title insurance commitment. The focus of the commitment is to provide assurance regarding the title and to set the stage for the eventual issuance of the insurance policy itself.