Title insurance protects a homebuyer if the property title has an undiscovered ownership claim.
Before a real-estate purchase closes, title professionals search public records for issues such as unpaid liens, forged documents, conflicting ownership claims, or recording errors. A title policy can protect the insured against certain covered losses or legal costs arising from defects that were not discovered during the search.
Title insurance is often confused with mortgage insurance. Mortgage insurance protects a lender or helps manage default risk when a borrower has a relatively small down payment; it does not establish who owns the property. Homeowners insurance instead generally covers physical risks such as fire or theft. Title insurance addresses the legal history of ownership, and its exact coverage depends on the policy and jurisdiction.