Title Insurance

Title insurance is an insurance policy that compensates a buyer or lender for loss caused by hidden defects in title that existed before the purchase, such as an earlier forgery in the chain of ownership, an omitted heir, or a mortgage or third-party right missed by the search. The premium is usually paid once at purchase and the cover looks backwards, not forwards. The product is central in the United States, where ownership depends on scattered county records and long chains of deeds, but it is not a common product in the Saudi market and there is no law specific to it. The reason is that protection in Saudi Arabia comes from the state itself: deeds are issued and documented through the Ministry of Justice, and the Real Estate Registration Law makes the competent authority responsible for ensuring the accuracy of property data and associated rights and gives the Real Estate Registry absolute probative force, open to challenge only for a clerical error or forgery. A person harmed by a first registration after it acquires absolute force, or by the registration of dispositions, goes to court to claim compensation from whoever caused the harm, not to an insurer. In practice, Saudi buyers and lenders replace title insurance with due diligence, an official deed inquiry, the seller's warranty against eviction under the Civil Transactions Law, and mechanisms such as paying off an existing mortgage directly from the price at transfer. Foreign investors used to the product may seek bespoke cover on large deals; any such policy must be issued by an insurer licensed in the Kingdom.