The American Land Title Association (ALTA) represents title insurance companies nationwide. Members of the Association search and insure land titles to protect real estate buyers and investors, as well as mortgage lenders.

In spite of a title search, being conducted prior to closing, unforeseen problems can occur to threaten the title to a property. Examples include mistakes in public records, undisclosed heirs making a claim on the property or forged deeds. For homeowners who purchase an owner's policy for a one-time fee at closing, the title company will negotiate these problems with third-parties and pay the claims and legal fees involved in defending the title.

The following example shows how unforeseen problems can affect a buyer’s title: 

A buyer purchases a home from a widow whose husband died without a will. After the closing, the late owner’s son from a previous marriage comes forward to claim his share of the home.  Because this son is from a previous marriage and no claim had been made, the title search, conducted in connection with the closing, did not show any claims against the title. In this case, an owner’s policy would protect the buyer by paying the claim from the missing heir.