What is the function of title insurance?

The function of title insurance is to protect against loss from title defects. This includes issues such as undiscovered liens, encumbrances, or claims against the property that may arise after the purchase. Title insurance provides a safeguard for the buyer and lender, ensuring that they will not incur financial loss due to issues that affect the title, thus giving peace of mind about the property’s ownership rights.

The policy typically covers legal fees and other costs incurred in rectifying these issues, which might not have been apparent during the initial title search. This coverage is crucial in real estate transactions, as it helps ensure that the buyer has clear and marketable title to the property, free from unexpected claims or disputes.