What is the primary purpose of title insurance?

The primary purpose of title insurance is to protect against potential title defects. Title insurance safeguards the interests of property owners and lenders by covering losses that may arise from undiscovered issues related to the title of the property, such as liens, claims of ownership, fraud, or mistakes in public records.

When a property is purchased, the buyer relies on the title company to confirm that the seller has the legal right to sell the property and that there are no encumbrances or issues that could affect the buyer's ownership. Title insurance provides assurance that the title is clear and offers financial protection should any disputes or claims against the title arise after the purchase is complete.

The other options, while related to aspects of real estate transactions, do not directly address the core function of title insurance. Ensuring the best mortgage rate is primarily related to mortgage financing, home warranty coverage pertains to protecting the physical condition of the home, and facilitating the closing of a transaction is more about the process of finalizing the sale rather than addressing title-specific issues.