When a property is financed, bought or sold, a record of that transaction is generally filed in public records. Likewise, records of other events that may affect the ownership of a property, like judgments or liens are also filed in public records.
When you buy title insurance for your property, a title company searches these records to find - and remedy, if possible - several types of ownership issues. First, the title company searches public records to determine the property's ownership status. After this search, the underwriter will determine the insurability of the title.