What is a primary function of a title insurance policy?

A primary function of a title insurance policy is to protect against property defects. This means that the policy safeguards the insured party, typically the buyer or lender, from claims or losses arising from issues related to the title of the property. Such defects can include unpaid liens, unknown heirs, fraud, or errors in public records that could affect ownership rights or diminish the value of the property.

By providing this protection, title insurance helps ensure that the buyer is taking ownership of a property that is free and clear of any legal encumbrances that could lead to future disputes or financial loss. This important function allows buyers and lenders to proceed with assurance, knowing they are covered against unforeseen issues that may arise after the property transfer.

The other choices, while related to real estate transactions, do not accurately describe the primary role of title insurance. For instance, estate planning is more focused on the management and distribution of an individual’s assets, and facilitating the sale of a home pertains to the overall real estate transaction process rather than the specifics of title protection. Ensuring a mortgage is paid addresses the financing aspect but does not capture the essence of title insurance's protective nature regarding property rights.