What type of protection does title insurance offer?

Title insurance offers financial loss coverage due to title defects. This type of insurance protects property owners and lenders from potential losses arising from issues related to the title of the property. Such issues could include incorrect information in the public records, outstanding liens or encumbrances, or claims from previous owners that were not disclosed during the purchase process.

If a title defect arises, such as a dispute over property boundaries or claims from undisclosed heirs, the title insurance will cover the legal costs and any financial losses incurred by the insured party. This coverage is crucial, as it provides peace of mind that the purchaser's ownership of the property is secure from unforeseen issues that could otherwise jeopardize their investment.

The other options do not accurately describe the scope of title insurance protection. For instance, property maintenance issues and environmental liabilities pertain to different areas of real estate and are typically handled through other insurance types or warranties. Exclusive rights to sell a property relate to listing agreements or sales contracts and do not constitute a function of title insurance itself.