What is the primary purpose of a title insurance policy?

The primary purpose of a title insurance policy is to protect the buyer from property defects. When a buyer purchases a property, they want assurance that the title is clear of any issues that could affect their ownership rights. Title insurance serves as a safeguard against potential legal challenges regarding the property's title, such as undisclosed liens, encroachments, or ownership disputes that may arise after the purchase.

By providing coverage for these potential defects, title insurance ensures that the buyer can confidently proceed with the transaction, knowing that they are protected from financial loss related to issues that were not identified during the title search. This protection is crucial, as it helps mitigate risks that could lead to costly disputes or claims against the property in the future.

While the other options may seem related to real estate transactions, they do not accurately capture the core function of title insurance as it pertains directly to verifying and protecting ownership rights against defects in the property's title.