What are the potential consequences of not obtaining title insurance?

Not obtaining title insurance can lead to significant financial loss due to undiscovered title defects or challenges. Title insurance serves as a safeguard for property buyers and lenders against issues that may arise with the property title, such as liens, claims of ownership by others, or legal issues that can arise from past transactions. If these issues surface after the purchase, the property owner could face legal battles and costly financial repercussions, which title insurance would have typically covered.

In contrast, the other consequences listed—such as increased property tax liabilities, legal obligations for property maintenance, and disputes with neighboring property owners—are not directly tied to the absence of title insurance. While these issues can arise independently of title insurance, they do not specifically relate to the protection title insurance provides against title defects and ownership disputes, thereby underscoring the importance of acquiring title insurance to mitigate financial risk associated with property ownership.