Which type of insurance protects the buyer or lender from losses due to title defects?

Which type of insurance protects the buyer or lender from losses due to title defects?

• A. Property Insurance
• B. Title Insurance
• C. Liability Insurance
• D. Homeowners Insurance

Answer: (B)

The type of insurance that protects the buyer or lender from losses due to title defects is title insurance. Title insurance serves a crucial role in real estate transactions by ensuring that any issues related to the property's title—such as liens, encumbrances, or ownership disputes—are addressed. This protection is vital because it provides financial security should any title problems arise after the sale, which could affect ownership rights. Title insurance is typically required by lenders when financing a property purchase as it protects their investment. Buyers may also choose to obtain title insurance to secure their ownership rights fully. Overall, this type of insurance is specific to the title of the property and is distinct from other insurances that cover different aspects of property ownership or liability.

The type of insurance that protects the buyer or lender from losses due to title defects is title insurance. Title insurance serves a crucial role in real estate transactions by ensuring that any issues related to the property's title—such as liens, encumbrances, or ownership disputes—are addressed. This protection is vital because it provides financial security should any title problems arise after the sale, which could affect ownership rights.

Title insurance is typically required by lenders when financing a property purchase as it protects their investment. Buyers may also choose to obtain title insurance to secure their ownership rights fully. Overall, this type of insurance is specific to the title of the property and is distinct from other insurances that cover different aspects of property ownership or liability.