In order to issue title insurance, the title company must search public land records for matters affecting that title. Many search the “chain of title” back 50 years. Twenty-five percent of title searches find a title problem that is fixed before the insurance is issued.
Some examples of items that can cause a problem are: deeds, wills and trusts that contain improper information, outstanding judgments or tax liens against the property, and easements. Title companies fix the problems then issue the title insurance
Occasionally, in spite of an exhaustive title search, hidden hazards can emerge after closing. Things such as mistakes in the public record, previously undisclosed heirs claiming to own the property, or forged deeds could cloud the title.
Owner’s title insurance offers financial protection against these by negotiating with third parties and paying claims and legal fees involved in defending the title.
For more information on reasons why you need title insurance, click here.