What is the primary purpose of title insurance?

The primary purpose of title insurance is to protect against financial loss due to defects in a property's title. This type of insurance serves as a safeguard for buyers and lenders, ensuring that the ownership of a property is clear and free from any encumbrances or claims that could affect its value or marketability. Title issues can arise from various sources such as liens, easements, or errors in public records. Title insurance provides coverage against these risks, offering peace of mind to property owners and helping to facilitate smooth real estate transactions.

In contrast to the other options, title insurance does not cover the costs of property repairs, insure household contents, or provide assessments of property taxes. These areas are governed by different types of insurance or assessments that serve distinct purposes unrelated to the security of ownership and title integrity.