What does title insurance protect against?

Title insurance plays a crucial role in real estate transactions by providing protection against financial loss that can stem from defects in the title of a property. When a buyer purchases property, they may not be aware of certain issues that could affect ownership rights, such as liens, encumbrances, or previous ownership disputes. Title insurance safeguards the purchaser by ensuring that they are protected financially if such problems arise after the purchase.

This insurance covers legal fees associated with resolving title issues, compensates for losses due to defects, and helps ensure that the buyer has clear ownership of the property. It is essential for buyers because it provides peace of mind, knowing that their investment is secure against potential title-related disputes that may surface in the future.

The other options do not accurately reflect the scope of title insurance. Legal fees may be covered, but only if they relate to title disputes and not general legal matters (such as disputes unrelated to title). Future changes in property value and costs related to home repairs are not within the purview of title insurance since these issues are not linked to the validity of the title itself.