Which statement accurately describes 'title insurance'?

Title insurance is primarily designed to protect against financial loss that may arise from defects or issues related to the title of a property. When you purchase a property, there can be various hidden risks associated with the title, such as liens, claims, or errors in public records that could affect ownership. Title insurance provides a one-time premium payment that will cover the insured party from these potential financial losses, giving peace of mind and security for their investment.

While it is true that title insurance does not guarantee complete ownership of a property, as there may still be issues that arise after the purchase, its main function is to provide financial protection against the specific risks associated with title defects, thereby making it an essential component of real estate transactions.