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Why do buyers need title insurance. Without a title insurance policy, there is no protection for the buyer. Any hidden problems not disclosed by public records or a mistake in tile examination might hold the buyer accountable for any prior issues relating to the property.y definition, title insurance is A policy issued by a title company after searching the title and which insures against loss resulting from defects of title to a specifically described parcel of real property or from the enforcement of liens existing against it at the time the policy is issued.
When a borrower takes out a loan to buy a home she or he obtains title insurance that ostensibly protects the buyer from defects in the title such as recording mistakes, forged deeds and the like. The lender also gets insurance in the form of a loan policy that secures its interest in the value of the titled property.