Title insurance primarily protects policyholders against...

Title insurance primarily protects policyholders against defects in the title that stem from past events. This includes issues such as prior liens, unpaid taxes, errors in the public record, or claims of ownership that may have arisen before the policy was issued. The insurance essentially ensures that the title to the property is clear and free from encumbrances that were not discovered during the title search, thereby shielding the policyholder from financial loss due to these historical title defects.

The primary focus of title insurance is on issues that existed before the purchase, rather than current ownership claims or compliance with state laws. While potential disputes may arise in the future, the core function of title insurance is to provide safeguarding against problems that come from prior ownership or unrecorded interests that could present a legal challenge to the property holder.