Title Insurance has historic precedence dated back to the 1800s; the purpose of Title Insurance is to assure marketable free title of property. In the early years, the title insurance policy was designed to protect lawyers from errors during their legal preparation of property documents should they fail to uncover any pending debt instruments filed against a property.
Unlike Fire Insurance, Homeowners Insurance and Life Insurance, title insurance protects against an unknown occurrence in the past rather than a future incident. This very important assurance secures the purchase transaction for the buyer.
Where Title Insurance secures the Title, Homeowners and Fire Insurance secures the home against covered perils. Unlike homeowners insurance, a small portion of the title policy premium is used to pay claims; a large portion of title policy premium is used to build and maintain effective databases in order to improve the quality of title search before issuing a new Title Insurance Policy.