When you purchase anything, you expect to be able to use it as you see fit. For most assets, this is fairly straightforward. But thanks to the special nature of real estate, and the fact that it has had many owners stretching back generations, unexpected claims could arise (regarding ownership or use) that could put your purchase in jeopardy. Title insurance protects you and the lender from losses should any defects in the title, hidden liens, or encumbrances come to light.