There are many possible causes of title defects that no examination can disclose. That is because they have never been recorded and thus do not appear in the abstract. A title insurance policy protects the owner against all these hidden risks; those listed below and many more:
Fraud: False claims of ownership, forged deeds, wills, signatures, conveyances, instruments, false representation, false records of all sorts, illegal acts of trustees, guardians, administrators, and attorneys.
Human error: Errors in copying, indexing, recording; errors by administrators, executors, trustees, guardians and attorneys; destruction of records.
Improper deeds and wills: Deeds by persons of unsound mind, minors; deeds delivered after death or without grantor’s consent; invalid, suppressed, erroneous wills, missing heirs, unsettled estates.
Liens and other rights: Liens for unpaid estate, inheritance, income, property and gift taxes; homestead rights, community property rights; irregular court proceedings, court opinion reversals, lack of court jurisdiction; defective foreclosures.