What is the purpose of title insurance in real estate?

The purpose of title insurance in real estate is to protect against losses that may arise due to defects in the title or ownership of a property. Title insurance provides coverage for issues such as unknown liens, incorrect legal descriptions, or undisclosed heirs that could affect the buyer's rights to the property. This form of insurance helps to ensure that the property is free from legal encumbrances at the time of sale, thereby giving the buyer peace of mind.

While other options may address various aspects of real estate transactions, they do not align with the core function of title insurance. For instance, guaranteeing a loan relates more to mortgage insurance rather than title insurance. Saving on property taxes is not a function of either title insurance or the ownership title itself, and assuring future appreciation deals with market value rather than the legal standing of property ownership. Title insurance specifically focuses on the integrity and security of the title, which makes it critical for protecting property investments.