An owners title insurance policy is an agreement that the insurer will pay all losses involved in any claim covered by the policy terms as long as you own an interest in that property.
The policy provides two types of coverage:
1- If someone contests your insured title in a legal action,
the insurer will defend the title at no expense to you.
2- If there is a defect in your title which cannot be
eliminated, title insurance provides financial indemnity
to protect you from loss due to the defect.
Your closing agent should be able to insure the title to your land by issuing or obtaining for you an owners title insurance policy.
The coverage of the title insurance is stated in the policy. Any policy can list matters substantially affecting title, which are exceptions to the coverage, and are not covered by the owners policy. Another type of policy is a mortgagees, or lenders title insurance policy. It protects only the holder of the mortgage and not the owner, but it's generally required in all loan transactions.
Why Title Insurance:
No research of the title records, no matter how thorough, can reveal hidden defects in the title, which can jeopardize your legal rights of ownership any one of many defects may appear unexpectedly to cause a costly loss, or require time consuming hours to clear.
Title Insurance protects you from damages or expenses incurred because of possible title defects such as:
Clerical error made at the courthouse when an earlier dee was recorded.
Instrument signed by a minor.
Improper legal description.
Overlapping legal descriptions.
A married signer who represents himself as single.
Title taken as a result of improperly probated Will.
Confusion of title resulting from similar names.
A deed signed by someone who claimed to owne the property, but in fact did not.
A deed signed by someone mentally incompetant.
A deed executed by someone who's power of attorney had expired.
Outright falsification of records.
Problems associated with a Will.
1- Adoption or birth of a chile after the date of a Will.
2- Failure to probate a Will
3- Improper interpretation of a will.
The appearance of a missing heir.