Likewise, defects in title might have arisen between the original purchase and the refinance. The new policy would also cover defects not detected when the previous policy was issued. Then, it will issue a title opinion letter, which is a legal document that speaks to the validity of the title. If a title issue is discovered, most often your title professional will take care of it without you even knowing. They will either pay the outstanding property taxes or risk losing the home to the taxing entity.
Closing costs include taxes, lender fees and title fees that a homebuyer pays at settlement. Basically, title insurance protects you against problems affecting the title to your home. As a percentage of the cost of real property, title insurance premiums probably average about one percent. Defend the title claim in court at your time and expense, regardless of the length of the lawsuit.
So title insurance protects both mortgage lenders and owners against past defects or problems with the legal ownership of a property.
Conveyance of a minor. Document Michigan Confidential