Title insurance is insurance that protects against losses that occur when title to a property is not free and clear from defects or encumberances (such as liens) that were unknown at the time the policy was issued.  The terms of the policy define what risks are covered and what risks are excluded from coverage. The title insurer will reimburse you for losses that are covered, up to the face amount of the policy, and any related legal expenses. This protection is effective as of the issue date of the policy and covers defects arising prior to your ownership.