What does title insurance protect against?

Title insurance is designed to protect property buyers and lenders from losses that can arise from disputes over property ownership. When a title search is performed during the real estate transaction process, it helps identify any existing claims, liens, or other legal issues that might affect ownership. However, it is possible for issues to surface after the transaction has closed, such as fraud, undisclosed heirs, or clerical errors in public records that were not identified prior to the transaction. Title insurance provides financial protection against these potential ownership disputes, covering legal fees and claims that could jeopardize the ownership of the property.

The other options, while important aspects of property management and ownership, do not fall within the scope of what title insurance covers. Natural disasters, fires, and emergencies pertain to property damage and would typically be covered by homeowners' insurance, not title insurance. Similarly, depreciation of property value over time is influenced by market conditions and economic factors, which are not addressed by title insurance policies. Thus, the focus of title insurance is specifically to ensure clear and marketable title to the property and protect against ownership disputes.