What does title insurance primarily protect a buyer from?

What does title insurance primarily protect a buyer from?

• A. Paying for hidden structural defects
• B. Homeowner's liability claims
• C. Title defects and defects in chain of ownership
• D. Loss due to market downturn

Answer: (C)

Title insurance protects buyers from problems with the property's title that could affect ownership, including defects in the chain of ownership that could cloud the title or block a valid transfer. A title search helps uncover these issues, but some problems may still surface after closing—for example forged documents, undisclosed heirs, misrecorded deeds, or liens that weren’t found during the search. The title policy provides protection against those kinds of title issues and covers the costs to defend or resolve them if they arise. This protection doesn’t cover the property’s physical condition, which is assessed through inspections and covered by homeowners insurance. It also doesn’t cover homeowner liability claims or losses from market value changes.

Title insurance protects buyers from problems with the property's title that could affect ownership, including defects in the chain of ownership that could cloud the title or block a valid transfer. A title search helps uncover these issues, but some problems may still surface after closing—for example forged documents, undisclosed heirs, misrecorded deeds, or liens that weren’t found during the search. The title policy provides protection against those kinds of title issues and covers the costs to defend or resolve them if they arise.

This protection doesn’t cover the property’s physical condition, which is assessed through inspections and covered by homeowners insurance. It also doesn’t cover homeowner liability claims or losses from market value changes.