What role does insurance play in title insurance offerings?

In the context of title insurance, the role of insurance is primarily to provide protection against losses that may arise from title defects. When someone purchases property, they are relying on the title to be clear and free from issues that could affect ownership, such as unpaid liens, encumbrances, or claims from previous owners. Title insurance serves as a safeguard by ensuring that if any of these problems arise after the purchase, the insurance will cover the loss.

This protective measure is particularly important because title defects can be difficult to detect before closing, and they can lead to significant financial losses for the buyer if they are not addressed. By obtaining title insurance, the buyer receives assurance that they will be compensated for any legal fees or losses associated with a title dispute, protecting their investment in the property.

While other options mention aspects related to property purchase and ownership, they do not directly relate to the primary function of title insurance, which is risk management through protection against title-related losses. Thus, the correct answer focuses on the fundamental purpose that title insurance serves in real estate transactions.