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Why do buyers need title insurance. Without a title insurance policy, there is no protection for the buyer. Any hidden problems not disclosed by public records or a mistake in tile examination might hold the buyer accountable for any prior issues relating to the property.y definition, title insurance is A policy issued by a title company after searching the title and which insures against loss resulting from defects of title to a specifically described parcel of real property or from the enforcement of liens existing against it at the time the policy is issued.
DEFINITION of 'Title Insurance'. Title insurance is an insurance policy that covers the loss of ownership interest in a property due to legal defects and is required if the property is under mortgage. The most common type of title insurance is a lender's title insurance, which is paid for by the borrower but protects only the lender. However, owner's title insurance can be taken out as a separate policy and is paid for by the seller to protect the buyer's equity in the property.