What is gap insurance?

A title insurance policy that provides insurance coverage to the policyholder for title defects that may arise during a “gap period,” the time between closing a real estate transaction and the actual recording of the real property instrument. If county recording offices are unable to record documents in a timely manner (e.g., during office closures due to the COVID-19 crisis), the title insurer covers the gap and potential exposure to title claims. (See Five Solutions to Keep Closings Flowing During the COVID-19 Crisis)