The title insurance business is an indispensable component of the real estate and mortgage finance business. Unlike a life insurance or property and casualty company, which will assume risk in return for a premium, the title insurance company and its agents will work with parties to eliminate all known risks prior to completing the transaction. This process of risk elimination is one of the most important services a title insurance company and its agents provide. A buyer or a mortgage lender needs to know that the seller or borrower is telling them the truth about what they own. Lenders and their investors need to know that they have a legally enforceable mortgage. A policy of title insurance eliminates many financial and legal risks inherent in even the simplest real estate transaction.
There are also many risks such as fraud and forgery which are covered by a title policy. Generally, the policies remain in force for as long as the insured owns the real estate interest covered in the policy and certain aspects of the coverage continue beyond ownership.