I was just at First American Title Company with a client who was signing all their final paperwork. People always wonder, why do I need title insurance?
Over 25 years ago I bought a duplex. About 10 years after I purchased the property I received a notice from the City of Portland indicating I owed them over $5,000 for sidewalk repairs. The repairs had been done by the previous owner and financed with the city. The loan should have been paid off when I bought the property but it wasn’t!! My first response was panic, but then I dug through all my paperwork and was able to contact the title company that handled the transaction. They took care of everything. Evidently the city had attached their lien on the wrong property and had finally discovered their mistake. The title company’s attorney dealt with the city and told them they were basically out of luck – it was their error and their problem. I have never again questioned the need for title insurance. That is just one of the many things that title companies take care of.
If you would like more information about the why and the what of title insurance, you might want to check out this website.