The first and most obvious reason is that the previous
owner could, in a very short time, do all sorts of things to encumber
the title. Among other things, he or she could grant easements or construct
improvements and encroach on adjacent property. The deed into the new
purchaser could be fatally defective because of forgery or incompetence
or any number of other circumstances.
In addition, if a title defect arises antedating the date of acquisition
of the property by the grantor to you, you would have to take action against
the grantor under the terms of the deed to you. In that case, as an insured,
the title insurance company would represent the defendant in your action.