Which statement correctly describes the function of title insurance?

The function of title insurance is primarily to protect property owners and lenders from financial losses due to defects or issues related to the title that may arise after the transaction has been completed. This includes issues such as undocumented liens, misinterpretations of wills, or unknown heirs who may have a claim to the property. By providing coverage for these types of undisclosed issues, title insurance helps assure that the buyer's ownership rights are secure against potential challenges.

In the context of real estate transactions, title insurance is crucial because it offers peace of mind to buyers by covering legal fees or losses that may occur if a title problem surfaces after the property purchase. This ensures that ownership remains undisputed and protects the financial interests of the policyholder.

The other statements do not accurately reflect the role of title insurance. For instance, title insurance does not allow the sale of property without disclosure of issues; rather, it aims to identify and resolve such matters beforehand. It also does not guarantee ownership for the life of the property, as the policy serves primarily as protection against claims rather than providing lifetime assurance of ownership. Finally, title insurance does not ensure that property value will increase over time, as property values are influenced by numerous market factors outside the scope of title insurance coverage.