As Ryan Huggins - Thousand Oaks, CA says a lender will require it, and  title insurance is smart even when a loan is not involved. Carol Williams has a good story.

I see no risk purchasing  title insurance. The risk of not purchasing it could be as simple as $5,000 worth of stupid to replace a lost abstract. I'm saying this out of experience being that was one document (the abstract) that we lost in the flood. Thank God we had title insurance or we would have been on the hook for $5,000. to have a new one built using our neighbors abstract.

I wouldn't advise anyone do that but the risk is purchasing a property with a clouded title & inheriting those problem liens. 

There are several risks involved but let me tell you a personal story.  My husband and I purchased a small orchard next to our home so we wouldn't be at the mercy of whatever a developer wanted to put there.  When we sold our home and the property next door, we discovered (through a new title search) that there was a $10,000 sellers debt that was never cleared when we purchased the property.  If we hadn't had title insurance we would have had to pay that $10,000 debt (that wasn't ours) in order to sell our property.  NEVER forego purchasing title insurance.

Example...my sister purchased a condo, years ago. It underwent a title search then and came back clean. She refinanced twice with no issues. When she refinanced the 3rd time all of a sudden a cloud was found from before she purchased the unit. Thankfully she had title insurance which took care of the repair

The biggest risk is that someone else will assert that they hold a prior ownership position or prior lien on the subject property. It could be expensive to resolve if you win and worse if you loose.

If financing is needed to buy the property, the lender will not fund a loan that does not included a title policy to protect their collateral. There fore, no title insurance, no purchase.

It's not an option if you get a mortgage.

Knowing what you bought and whether or not who you're buying it from has the right to sell it to you, for starters.

Interesting question......

Just Don't Do It ... Wrong Move ... Not Worth all the Risks.  Don't Even Think About It. 

What difference would that make... unless you are paying cash, it's a requirement/condition of final approval for a mortgage.

Ryan Huggins - Thousand Oaks, CA gave you the answer.  A

I don't think you can get away with it as the lender requires it.  Even on a cash transaction you need to have clear title.  I actually recommend purchasing extra coverage, just in case.  

You do have an option of not buying it if you pay cash or get it as a gift. TI allows the new homeowner to have free and clear ownership of the house or property.

Big ones, grasshopper.

There could be a lien, or some claim on ownership to the property.

Sleepless nights 

Possible financial losses if fraud or title errors are discovered.

Great question for your local real estate attorney. 

Oh, the horror stories! It's a must, whether you're obtaining a mortgage or paying cash.

Once the chain of insured title is interrupted it can be difficult to obtain. Lenders require it and a cash buyer is foolish without it!

the risks could be that you purchased a home with a title that NEEDED to be insured to cover problem.... the attorney who certified title could be dead... can't sue the dead!!!

If a lien real or not surfaces...you bought it. With Title Insurance they buy it

Countless

I have at least 12 clients over 20 years that can answer your question. They saved a boat load of money when title failed to find errors or omissions...

There is no choice. But assuming that is the case don't you think you get sued not having the protection.

So you are still at school? When you plan to take the test.

All the best.

Don't have a choice in CO.

I had a deal that went 3 years and $50,000 to fix.

I believe most mortgage company would insist on it

The risk is just not making wise decisions. 

Tax man takes it away. Lender forecloses. Maybe the guy doesn't own it to sell? County or city red tags and condems. Judgement takes property. Angry people show up and evict you. Can't get a loan.... just a few

The potential of losing your home.

I always ask my clients, "how many banks do you know that are going out of business?" They always respond with, "none". So I tell them the bank makes them purchase lenders title insurance for the bank, so wouldn't it be your best interest to purchase Owner's Title Insurance for yourself.  I haven't had any not purchase it.

It guarantees you actually have title to the house.

There are multiple risks but the biggest one IMO would be not owning the property you thought you did.

I have run into title issues many times over the years. The owners who had the insurance were thankful they did. I'm currently in the middle of a title issue w/ a tract of land where the owner doesn't have title insurance and the legal bills are eating into the Seller's equity.