What does title insurance primarily protect against?

Title insurance primarily protects against liens, encumbrances, and other title defects. This type of insurance is specifically designed to address issues related to the ownership of real estate. When a title is examined, any potential problems such as outstanding liens from mortgages or taxes, unresolved ownership disputes, or claims of easements can threaten the ownership rights of the property holder.

By providing coverage against these risks, title insurance ensures that, should any claims arise that challenge the ownership of the property after the purchase, the insurer will handle legal costs and potential settlements, securing the buyer's financial interest in the property. This protection is crucial for property buyers who want to avoid unexpected costs and legal battles associated with ownership disputes that may arise after closing.

In contrast, the other options do not align with the primary focus of title insurance: protecting against risks directly related to legal ownership and title status rather than physical damage or fraudulent activities related to contracts.