What does title insurance protect against?

Title insurance protects against losses arising from defects in the title to a property. This type of insurance is specifically designed to provide coverage for issues that may affect the ownership of a property, such as unknown liens, invalid claims, or undiscovered easements. These title defects can result in financial losses if they are not uncovered during the property transaction process.

When a buyer purchases a property, they want assurance that the title is clear and that they have full ownership rights. Title insurance facilitates this safety net by covering legal fees and potential losses that may occur if a title issue arises after the property has been purchased. This protection is crucial for ensuring that the investment in real estate is secure and that the buyer can defend against any future claims that might challenge their ownership.

The other options—losses from property damage, market fluctuations, and natural disasters—do not fall under the scope of title insurance, as they pertain to different risks associated with property ownership and not specifically related to the legality or validity of the property title itself.