What is the main purpose of title insurance in real estate transactions?

The main purpose of title insurance in real estate transactions is to protect against financial loss due to title defects. When a property is bought, buyers and lenders want assurance that the title to the property is clear and free of any claims or liens that could affect ownership rights. Title insurance provides this protection by covering losses that may arise from issues such as undisclosed heirs, liens, or errors in public records.

By purchasing title insurance, the policyholder is safeguarded against potential financial losses that could occur if a title problem arises after the sale has been completed. This is especially important because title issues can be complex and can take considerable time and resources to resolve, often resulting in substantial financial implications for the buyer or lender.

The other options relate to different aspects of property ownership and maintenance. Protecting against property damages and covering repair costs are more concerned with homeowner’s insurance or warranty policies rather than title insurance. Ensuring public records accuracy, while important, is not the primary function of title insurance; instead, the focus is on protecting financial interests related to the title itself.