What is meant by "gap coverage" in title insurance?

Gap coverage refers to the protection provided by title insurance against potential losses that may occur during the interval between the closing of a real estate transaction and the actual recording of the deed in the public records. This period, often referred to as the "gap," can expose the buyer or lender to risks such as claims by other parties if their interests are recorded after the closing but before the deed is officially registered.

In this context, the correct choice emphasizes the crucial protective nature of gap coverage, as it ensures that any unforeseen claims or issues that arise during this interim period do not jeopardize the new owner's ownership rights. This type of coverage is especially important since the title may not be completely secure until after it has been properly recorded.