History of the Development of Title Insurance

When many people purchase or sell property, they automatically purchase title insurance to ensure that they do not incur any losses during the transfer of the property. Today, this is common practice; however, in the past, title insurance was never purchased and investors would run a large risk of losing money during the transfer of property.

Before the creation of title insurance, people would simply transfer the title in good faith that the title was sound. In most instances, this practice was safe; however, there were recorded cases where people lost a great amount of money because certain people were dishonest about a property title. Before the creation of vital title insurance, these individuals had no action of recourse that they could follow to try to recover some of their losses.

One of the most celebrated lawsuits that helped to establish the need for title insurance was Watson vs. Muirhead, which took place in 1868. Muirhead was a respected conveyance who had performed all of the necessary research for the purchase of a property by Watson. Muirhead choose to ignore some recorded judgments that had been placed on the title and reported that the title was good.

Based on this information, Watson proceeded to purchase the property; however, he was quickly informed that he would be required to pay the liens that were placed on the title. Because there were no standards in place for needed title insurance, Watson lost a great amount of money.

The results of this case clearly demonstrated that the current system needed to be reformed and title insurance was soon developed. Some of the aspects that title insurance cover are financial protection and responsibility without proof of negligence. More information about title insurance, and where to purchase title insurance, can be found at EasyTitleQuote.com