Why do we need title insurance when the constitution has the Contract Clause?

Question

If you've bought a house, you are aware of being offered title insurance to protect your interest in the property should someone at a later date file a lien, dispute right-of-ways, easements, mineral rights, etc. I don't see how title insurance has a place. Retroactive claims are invalid after a sales contract has been agreed to by the seller and buyer. The Supreme court upheld this stating that Article I, Section 10, Clause I (the Contract Clause) of the Constitution states a contract of sale cannot be invalidated, even if illegally secured. Looking at the Yazoo land scandal and the U.S. Supreme Court case Fletcher v. Peck (which resulted in the rulling that the sales were binding contracts and could not be retroactively invalidated); how is title insurance is even needed? Granted, there may be small issues where the retroactive transfer of real property don't come into play but how big of an issue can this be? Are buyers not protected by the contract clause and precedence?

Answer 1

Look at it this way,

Better to be safe, than sorry.

Answer 2

Owning property with an imperfect title is possible but you do realize that nobody wants to buy something that may not be marketable because of the actions of prior tenants.

Besides that it is possible to enter into a purchase contract with someone who never had title. There is no way to enforce a contract that was invalid. Recovery against a schiester is next to impossible recovery from a insurance company is pretty easy to perfect if you have a valid claim.

Answer 3

The clause you cite has absolutely nothing to do with land transfers and adverse claims against title.