What role does the title insurance play in a real estate transaction?

Title insurance plays a crucial role in real estate transactions by protecting the buyer from future claims against the property. This type of insurance safeguards the buyer's financial investment by covering losses incurred due to defects in the title that may not have been discovered during the title search. These defects can include outstanding liens, irregularities in the chain of title, or other claims that might arise after the property has been purchased.

The importance of title insurance lies in its ability to provide peace of mind to buyers knowing that if any issues arise that challenge their ownership or financial investment in the property, they will have coverage to address those issues. It ensures that the buyer is protected from legal disputes or financial losses linked to past events or claims against the property title, making it an essential component of the property transaction process.