First American Title Insurance Company has a great answer to those questions!

A title insurance policy is an insured statement of the condition of title, or ownership of real property.  Prior to the issuance of a policy, a title report or commitment is prepared after a search of records, maps and documents affecting the parcel in question.  For a one-time premium, the policy protects the named insured against title defects, liens and encumbrances existing as of the date of the policy and not specially excepted from coverage.  First American Title Insurance Compnay stands behind it’s product.  Make sure you choose a good title insurance before you close on your next property.

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