What is "title insurance" primarily meant to protect against?

Title insurance is designed to protect against defects in title and disputes over ownership of a property. When a property is bought, the title insurance policy ensures that the buyer has clear ownership with no legal issues or claims against the property that would affect its marketability. This protection is crucial because title issues, such as liens, undisclosed heirs, or errors in public records, can arise unexpectedly and may result in significant financial loss or legal disputes after a purchase.

The reasons other options do not represent the primary purpose of title insurance include the fact that natural disasters, while they can impact the property, are typically covered by different forms of insurance such as homeowners' insurance. Loss of rental income pertains to other risks associated with property ownership, such as tenant issues or market demand, rather than ownership disputes. Market fluctuations are related to real estate value changes over time and are also outside the scope of what title insurance addresses. Thus, title insurance specifically focuses on ensuring that the legal ownership of the property is secure and undisputed, making it vital for property transactions.