Title insurance is a one-time-premium policy that protects a buyer or lender against a defect in the property's title that a title search missed, such as a forged deed, an unknown heir, or a lien that was never properly released. Unlike most insurance, it covers past events rather than future ones, and it pays the covered party's legal costs and losses if a claim against title arises after closing.
Why it matters
A clean title search does not guarantee a clean title, which is why title insurance exists as the backstop.
General information, not legal or tax advice.