What is the primary purpose of title insurance?

The primary purpose of title insurance is to protect against financial loss from defects in the title to real property. When a property is purchased, there may be hidden issues related to ownership, such as undisclosed liens, encumbrances, or errors in the public record. Title insurance provides a safeguard for the buyer by covering any financial losses that might arise from these potential title defects after the transaction has closed.

This protection is crucial because it ensures that the buyer has clear ownership of the property and can defend against claims or disputes regarding property ownership. The insurance typically covers legal fees and costs associated with defending the title as well. Unlike other types of insurance, which typically cover future events, title insurance focuses on past issues that might threaten ownership rights.

Other options describe different services and purposes but do not pertain to the core function of title insurance. For example, securing a mortgage relates to financing rather than title assurance, while repairing a property and ensuring compliance with building codes address physical aspects and legal requirements of a property rather than ownership claims. Thus, the function of title insurance distinctly centers on protecting the buyer from past title-related issues.