What does title insurance primarily protect?

Title insurance primarily protects the good and marketable title of a property. This type of insurance ensures that the property being purchased is owned by the seller and that there are no outstanding claims, liens, or other encumbrances that would negatively affect the buyer's ownership rights. It provides peace of mind to the buyer by protecting against potential legal issues that could arise from disputes over ownership or other title-related problems that may not have been uncovered during the standard title search process.

While other options reference valid forms of insurance, they do not pertain specifically to the purpose of title insurance. Personal belongings insurance addresses items owned by the policyholder, property damage coverage relates to physical damage from disasters such as fires or floods, and legal dispute insurance typically covers litigation costs rather than title disputes. Title insurance stands out as it focuses exclusively on ensuring that the title to the property is clear and will remain so.