Surname 1Student's nameInstructor's nameCourseDateCase of Sam and MarthaAs indemnity insurance, title insurance protects a property holder from any kind of financial loss sustained as a result of defects in a title to a specific property. In essence, it protectsagainst claims for past occurrences such as property ownership by a third party and any litigationthat challenges the legality and validity of the new property owner. However, the title insurance does not protect a property holder against known title defects which were clearly communicated or revealed to him or her before the actual purchase took place (Daniel, 145). Thus, in the case ofSam and Martha, the title insurance would not cover them against Paul’s claim. This is because before Peter sold the house to Sam and Martha, he actually informed them about Paul’s interest in the house whilst assuring them that he had absolute authority to sell the house where they proceed and purchased the house.