What is the function of a title insurance policy?

A title insurance policy serves a crucial function in real estate transactions by providing protection to property owners against defects in the title that were unknown at the time of purchase. These defects could include issues such as undisclosed liens, ownership disputes, or errors in public records, which can potentially affect the ownership rights of the property. By having title insurance, the property owner can be financially safeguarded from losses that may arise if a problem with the title is discovered after closing the sale.

This protection extends not only to the current owner but also to their heirs and can offer peace of mind knowing that their claim to the property is secure. Title insurance is particularly important because it addresses issues that might not be evident during a property search or title examination and emphasizes the importance of having a safe and clear title when purchasing a home.