Title insurance is an agreement of indemnity between the purchaser and the insurance company, so through a title insurance policy you will be protected in the event that there is any claim in title because somebody has a better right to the property. This is a consequence of fraud, forgery of documents, lost heirs and overlaps of property. Since obtaining title insurance in Mexico is highly recommended I´ve put together some facts below that showing why it is an important part of purchasing property in Mexico.
The bank trust is the only financial vehicle through which you can obtain your money back if there is a claim in title and you lose the property.
In Mexico it is the only vehicle through which you can be protected that will give you a guarantee that if you lose the property because of fraud or any claim in title that causes you to actually lose the property, you can get your money back. No-one will do that. Not the attorneys, not the notary public, not the government, public registry- no-one. If you don´t have title insurance and there is a claim in title then you are on your own. You would have to fight off any litigation if that is necessary and protect your property.
If there is a claim in title the insurance policy would pay every single amount of money necessary to protect the title.
Prior to having your property insured your lawyers will have to verify that the property is free and clear of any liens, and that the seller was the rightful owner. Title research allows them to verify that everything is in order. That is why through the title research they will obtain a complete chain of title from beginning to end, going as far back until the time of the revolution if necessary. This is to verify that all the conveyance in title through every single transfer of title or modification of the property was done appropriately. The underwriting process will determine if the property is insurable or not. If there is something wrong the insurance policy could have an exception of coverage or we can deny the granting of the insurance policy.
If there is a valid claim in title it would fought it off in court and if you do suffer the loss you would be indemnified.
Let´s suppose that in the future somebody comes up knocking on your door and says that your property is theirs and they have legal documents to prove they are the owners. If you have the insurance policy your legal representatives would go back, review the documents, and see why there is a claim in title.  And the indemnity means paying you the amount of money you spent on the property, meaning the purchase price recorded in the title. Through the insurance policy you would be fully protected for any claim in title.
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