What does a title insurance policy primarily protect against?

A title insurance policy primarily protects against title defects, which are issues that may arise concerning the ownership and rights to a property. These defects could include problems such as liens, unpaid taxes, fraudulent claims, or other legal encumbrances that may not be discovered during a standard title search before the property is purchased. By ensuring that the title is clear of any issues, the policy safeguards the buyer's investment and provides peace of mind that their ownership rights are secure.

Natural disasters, property damage, or market fluctuations do not fall under the scope of title insurance coverage. Instead, those aspects are typically managed through other forms of insurance, such as homeowner's insurance for property damage or flood insurance for specific natural events. Title insurance specifically focuses on the legal aspects of property ownership, thereby providing crucial protection against potential claims or disputes related to the title itself.