What does 'title insurance' protect against?

Title insurance is primarily designed to safeguard property owners and lenders from financial losses that may occur due to defects in the title of the property. This means that if there are any undiscovered liens, claims, or even instances of fraud related to the ownership of the property that arise after the purchase, title insurance provides protection against any financial repercussions stemming from those defects.

When a property is bought, a thorough title search is usually conducted to identify any potential issues. However, not all problems can be detected during this search. Title insurance ensures that if a claim arises later concerning past ownership issues, the insured parties are financially protected, enabling them to handle legal costs or settlements related to such claims.

Other options, while related to property ownership, do not fall under the scope of what title insurance covers. For instance, losses from natural disasters, injuries on the property, and legal disputes over property boundaries involve different types of insurance or legal measures and are not aspects that title insurance is intended to address. Thus, the protection from defects in title is the specific function and purpose of title insurance.