Why do I need Title Insurance?

I am buying a property for cash. My lawyer has reviewed the owner's title and says it's good but he wants me to buy Title Insurance from him. Why should I spend the money on this?

A Title Insurance policy provides two types of coverage. If someone
contests your insured title in a legal action, the insurer will defend the
title at no expense to you. If there is a defect in your title which cannot
be eliminated, title insurance provides financial indemnity to protect you
from loss due to the defect.

In order that you may make an informed decision, I have listed below some
of the possible defects which could jeopardize your investment. Even though
your attorney may have thoroughly researched the public records affecting
your property, certain defects in title are hidden in such a way that an
examination could not be expected to discover them. These defects include,
but are not limited to the following:

Forgery
Fraud
False Affidavit
Infancy
Insanity and Incompetency (not yours, some previous Seller's)
Perjury
False impersonations
Erroneous interpretations of Statutes and Rules of Law
Undisclosed or missing heirs
Suppressed or undiscovered Wills or Codicils
After-born or adopted children
Powers of Attorney revoked by death or insanity
Dower claims
Claims arising by reason of foreign divorces
Bankruptcies in other jurisdictions
Unrecorded contract of sale

At Buy the Beach Realty, we urge all our purchasers to purchase title insurance. Moreover, although you might spend a little bit more at closing to insure your interest in the property, you will regain a part of it when you sell the property. Generally, it is less expensive and faster for a Seller to provide an existing Title Insurance policy as evidence of good title at the time of a sale than to pay for an "Abstract of Title." The savings in your closing costs on the subsequent re-sale of your property can help offset the price of the Title Insurance that you paid at purchase.