Ace Your Affiliate Broker Tennessee (TN PSI) 2025 National Exam – Unlock Your Real Estate Future!

Title insurance plays a crucial role in real estate transactions by providing protection for both the buyer and the lender against potential issues related to the title of the property. This type of insurance safeguards against any legal claims or disputes that might arise after the sale, such as liens, encumbrances, or ownership disputes that could affect the buyer's right to the property.

When a buyer purchases a home, they might not be fully aware of any past legal issues or claims related to the property that could surface in the future. Title insurance helps to ensure that if such issues arise, the insurer will cover the financial losses associated with resolving those problems, thereby protecting the buyer's investment. Additionally, lenders often require title insurance as part of the financing process to protect their interest in the property they are lending against.

Other options address different aspects of real estate concerns, such as appraisals, construction quality, and personal property coverage. While these are important considerations in real estate transactions, they do not pertain to the primary purpose of title insurance, which is to secure the proper ownership of the property and mitigate risks associated with title defects.