Why is title insurance necessary even in new construction?

Title insurance is essential even in new construction primarily because it safeguards against potential claims related to title defects that may not have been uncovered during the buying and building process. Even a newly constructed home can have issues stemming from prior ownership or unrecorded liens, such as unpaid contractors, easements, or encroachments that could affect the homeowner's title.

With title insurance, the policy provides coverage for legal expenses and claims that may arise from such issues. These problems might include competing claims to ownership or rights that could emerge after the purchase, which thorough due diligence might not have uncovered. The assurance that the title is free of defects offers vital peace of mind to homeowners, allowing them to possess the property free from risks that could jeopardize their ownership rights.

The other options focus on aspects of construction compliance, delays, and material safety, which, while necessary, do not specifically address the protection of the title itself and the myriad of potential undetected problems that can plague even newly built properties.