Title insurance is an insurance policy that is either given to the owner of the property or the bank to insure against losses or claims. For the owner, it would insure them against other people claiming ownership of the property. It would protect them against people claiming unpaid lien. For a bank, title insurance insures that if they need to foreclose on the property, there is no impairment and they are able to do so.
The obvious benefit of having title insurance is protection. If you are purchasing a home for $200,000 and you receive a letter in the mail saying someone else's aunt owns this property, you need to know you have full ownership and right to be on that property. You call the title insurance company, and they have to defend your claim in court at their expense.
Title insurance is not required in buying a house. However, it is recommended. If your contract says that you are going to get title insurance, then you have to have title insurance. To gain title insurance, you must either go through an attorney or a title insurance title company.
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