What is the function of title insurance?

The function of title insurance is primarily to protect against title defects and potential losses related to the ownership of a property. Title insurance provides financial protection by safeguarding the policyholder from claims or legal fees that may arise due to disputes over property ownership, unforeseen liens, or other title issues that may not have been discovered during the title search. This peace of mind is critical for buyers because it mitigates the risk associated with inheriting unresolved issues related to the property’s title.

In contrast, other options describe functions that are not associated with title insurance. For example, securing a loan for the buyer is related to mortgage financing rather than title insurance. Covering repair costs of the property pertains to homeowners insurance or warranty programs, while guaranteeing the sale price relates to aspects of negotiations or agreements between buyers and sellers, not title insurance. Therefore, the specific function of title insurance is protection against unforeseen title-related issues, making it essential for anyone engaging in a real estate transaction.