There are two types of title insurance purchased with the sale of a property in Arizona. The title company issues the policies and act as settlement or escrow agents.

The Lenders' title insurance is required by virtually all lenders to assure them that should a title defect arise, their investment in the subject property is protected. Lenders require the Borrowers to pay for lender coverage as a condition of obtaining a loan. This policy protects the lender’s interest. In general, the lender is concerned with protection against defects and with priority of its recorded loan.

Owners title insurance protects the purchaser from any title claims arising from the previous ownership. The owner is protected from such problems as fraud, forgery and filing errors. Title insurance is a contract of indemnity that guarantees against the defects in title. In Arizona, most real estate transactions are closed with a title insurance policy. Many homeowners make the assumption that when they purchase a piece of property, possession of the deed is all they need to prove ownership. However, there is a possibility that there are hidden hazards attached to the real estate.