Title insurance is the application of the general principles of insurance to real estate titles.
But, unlike other types of insurance which protect the insured against loss due to unexpected future events, title insurance protects against loss which may occur due to events that took place in the past. Specifically, title insurance protects the buyer against loss resulting from previously unreported land title defects insured against, such as forgeries, claims by missing heirs, recording errors, etc. If a future claim against the title to real property results either in the loss of title to the property, or expenses to clear up title defects uncovered by such claims, title insurance will provide compensation up to the face amount of the policy. This is true regardless of how many claims are brought during the life of the policy. These include rights of way, easements, etc., as well as restrictions that may have been placed on the use of the property by previous owners.