While buying a property, there can be many unseen risks that can happen in the future. Even if you had a title search done during the time you're in escrow before you purchased the house, it is likely that something has been missed and somebody could file a claim against your house.
More probably, a prior owner had given another individual permission to utilize the property in a certain way without recording it. You can get national REO title and default services at Bay National Title Company.
Title insurance operates by protecting you from defects in the title. These flaws occurred before the date of your coverage being issued and before you taking possession of their property.
Title bureaus will find out more about the history of their house to recognize and fix flaws in the name before they issue a policy. If they find flaws in the name; the flaws will be adjusted or recorded as exceptions to the coverage.
This is extremely different from most other kinds of insurance such as homeowners insurance, which protects you from hidden future occasions.
The key point to consider about title insurance is it is an indemnity policy that merely protects you from actual reduction. This might be loss of usage or monetary loss, but unless there's some kind of reduction involved, your coverage won't protect you from claims.
Though this might appear confusing, the important point to remember when confronted with a claim is if you're suffering a genuine loss.