Posted by Rob FL on December 17, 1999 at 10:09:13:
Title insurance just like any other insurance pays money to the insured person if there is a claim. A claim would be a defect in the title, missed liens, lack of access to a road, foregeries, fraud, etc.
Attorney’s title opinions used to be widespread in the U.S. until the 1950s. The only problem is, what happens if the attorney missed a $500,000 lien on the hotel you bought. Do you really think he could pay to fix it? What happened if the attorney died or went bankrupt, who would pay then? Also most attorneys title opinions have “abstracters liability.” This means that if something outside the chain of title occurs the attorney is off the hook. If there was a forged deed, an unrecorded lien, or mortgage fraud, the buyer would not be protected by the abstracters liablity.
For more info here are some title insurance websites: