What is the primary purpose of title insurance?

The primary purpose of title insurance is to safeguard homeowners from financial losses due to title issues. This type of insurance protects buyers and lenders from problems related to the title of the property, such as undiscovered liens, claims from previous owners, or other encumbrances that may affect ownership rights.

Title insurance ensures that the buyer's ownership is secure and that they are not financially liable for legal issues stemming from challenges to the title. If a title defect arises after the purchase, the title insurance policy will cover the legal fees and any financial losses that the insured may incur while resolving the issue. This protection is critical because title problems can be expensive to rectify and can drastically impact the value and enjoyment of the property.

In contrast, the other options do not accurately reflect the primary role of title insurance. For instance, it does not cover ongoing property maintenance costs, nor does it guarantee the market value of a property, which can fluctuate based on various factors. While title insurance may provide some level of support in legal disputes regarding property ownership, it does not typically include legal representation as part of the policy. The focus is specifically on protecting against financial losses due to title-related issues.