What does "title insurance" protect against?

Title insurance is designed to protect property owners and lenders from financial losses related to defects in a property's title. This encompasses a range of issues, including unknown liens, encumbrances, or disputes about property ownership that can arise either from prior transactions or legal claims against the title. The insurance acts as a safeguard by providing a level of financial protection and liability coverage that can help resolve these issues if they occur.

Understanding this, the other options do not align with the primary function of title insurance. For instance, loss from natural disasters pertains to the physical structure and condition of the property rather than the legal ownership rights. Similarly, accidents occurring on the property are addressed through liability insurance, not title insurance. The loss from depreciation of property value is related to market conditions rather than title itself, which further distinguishes the specific protection offered by title insurance. Thus, the focus of title insurance is squarely on the legal aspects of property ownership and potential claims to that ownership.