What is the primary purpose of title insurance?

The primary purpose of title insurance is to guarantee loss against title defects or disputes. Title insurance protects property owners and lenders from potential claims against the title that arise from unforeseen issues, such as liens, encumbrances, fraud, or other defects that may not have been discovered during the title search.

When a property is bought, the seller provides a warranty of clear title. However, the history of a property can include hidden issues that may not be revealed until after the purchase. Title insurance provides financial protection in the event that a claim arises based on these defects, ensuring that the policyholder is covered for losses associated with any legal challenges related to the title of the property.

The other options focus on aspects of coverage that do not align with the core function of title insurance. Claims of property damage and homeowner's injuries are often covered by homeowners' insurance, while zoning issues are typically addressed through local regulations and planning rather than being an aspect of title insurance coverage. Therefore, the guarantee against title defects is the essential and defining characteristic of title insurance.