What is a possible consequence of not obtaining title insurance?

Choosing not to obtain title insurance can lead to significant consequences, particularly regarding financial loss from undiscovered title defects. Title insurance serves as a protection mechanism for property buyers and lenders against issues related to the property’s title that may not be identified during the purchase process. Such defects could include liens, claims by unknown heirs, fraud, or errors in public records.

If these issues emerge later, the property owner could face costly legal battles to resolve the title defects or, in some scenarios, even lose ownership of the property altogether. Title insurance helps cover these risks, and without it, an individual may find themselves financially vulnerable should a title issue arise, ultimately leading to substantial out-of-pocket expenses or lost investments. This underscores the importance of securing title insurance when purchasing real estate to mitigate such risks.