How Title Insurance Works
When you are buying a home, checking the property’s ownership history is part of the process. If your home comes back with a clear title that means the current owner who is selling to you has a complete ownership stake in the property without any legal claims against it.
Even with a clean title, title insurance is still necessary. The U.S., the recorder of deeds doesn’t guarantee perfect accuracy in its record keeping. There would be mistakes in the ownership history, a previously unknown heir, pending legal judgements, fraud or forgery that arises.
After a loan closing, a title defect can lead to a variety of legal costs and even the loss of your property. There is a cost associated with title insurance, but it is certainly necessary when you consider the potential loss you can incur without it. With title insurance, you are protecting the investment of your home.