A quit claim deed says, essentially: "I give up any rights that I may have in this property."
For example, would you like to buy a quit claim deed for the Statue of Liberty? I'd be glad to sell you one. It's legal. It's legitimate. It's valid. I will sell you whatever rights I may have to my ownership in the Statue of Liberty. If it turns out that I do own it, then it's yours. But if I don't own it, then you've received nothing. I didn't promise you that I owned it. I only said (via the quit claim deed) that I'd give any ownership that I did have to you.
In your case, if someone else owns the foreclosed property--or if someone else asserts that he/she owns it--then that's a big problem. You're absolutely right to consider title insurance . . . but I'm not even sure it'd be available on a quit claim deed.
Another issue--and I'm not sure of the answer--is what would occur when you attempt to sell the property. That is, what type of deed you'd have to offer and transfer to the buyer. Please check into that. Just as you're legitimately being cautious, anyone buying that property from you would be awfully reluctant to buy without a more solid deed.
Check with a lawyer. Start with a title company that should have lawyers knowledgeable in such issues.
Hope that helps.