Title insurance is issued only after a comprehensive title search, one that traces ownership, examines liens, and determines other recorded encumbrances. Yet even the most thorough and professional search can’t prove that absolutely no title hazards exist.
Not all threats to a clear title are reflected in public records. Claims by heirs, encroachments from neighboring property owners, the effects of local zoning ordinances, bankruptcy filings and potential claims of contractor non-payment can be difficult to discover during a title examination—even when done by an experienced professional title examiner.