What is the primary reason for obtaining title insurance?

The primary reason for obtaining title insurance is to protect against financial loss from defects in the title. Title insurance provides assurance to the property owner and lender that the title to the property is free from any unforeseen issues, such as liens, encumbrances, or fraud that might arise after the purchase. Unlike other types of insurance, which protect against future events, title insurance protects against events that occurred before the insurance policy was issued.

When a title search is conducted prior to closing, it may not reveal all issues, and some problems may emerge later. Title insurance covers these potential financial losses, ensuring that if a claim against the title arises, the insured party is compensated, thereby safeguarding their investment.

Other options address different aspects related to property transactions, but they do not capture the fundamental purpose of title insurance as comprehensively as the protection against financial loss does.