How does 'homeowners insurance' differ from 'title insurance'?

Homeowners insurance provides protection primarily against property damage caused by events such as fire, theft, and natural disasters, and it offers liability coverage, which protects the homeowner in case someone is injured on their property. This type of insurance is crucial for homeowners, as it helps cover the costs associated with repairing or replacing damaged property, as well as potential legal claims from guests who might be injured.

On the other hand, title insurance serves a different purpose: it protects against defects or issues with the property's title. This could include claims of ownership by other parties, liens against the property, or errors in public records that could affect ownership rights. Title insurance provides peace of mind for buyers and lenders by ensuring that the title to the property is clear and free of disputes.

The distinction in function is key—while homeowners insurance focuses on property and liability coverage, title insurance is concerned with the legal ownership of the property. Therefore, the chosen answer accurately reflects these fundamental differences between the two types of insurance.