Is Title Insurance Really Necessary?
The short answer is: yes.
To understand why you should have title insurance, you must first understand what “title” is. When you purchase real estate, at the closing you receive “title” to the property. “Title” is the owner’s right to possession and use of the property. There are different forms that “title” can take: individual ownership, tenants in common, joint tenants, life tenant, etc.
There are also different uses for land and the rights for those uses can be given or sold, or they could be restricted by prior title transfers. There can be different owners for different uses: one person may have mineral rights, another air rights, and another utility rights on the same piece of property. A mortgage lender can have an interest in the property, as can anyone who performed work on the property if they filed a lien against it. The government can have a lien for unpaid taxes, and the municipality or a utility company could have an easement giving it the right to string utility lines across the property.