Who benefits from a title insurance policy?

A title insurance policy provides protection to both the buyer and the lender, which makes it advantageous for both parties involved in a real estate transaction.

For the buyer, title insurance safeguards against potential claims or defects in the title that may arise after the purchase, such as undisclosed liens, boundary disputes, or issues stemming from prior ownership. This assurance allows the buyer to proceed with greater confidence, knowing their investment is protected against such risks.

For the lender, title insurance is essential because it ensures that the lien created by the mortgage is valid and that there are no other claims or issues with the title that could jeopardize their security interest. If any title problems arise, the title insurance can cover the lender's financial loss, allowing them to recover their investment.

In contrast, options that state only the seller, only the buyer, or only the lender would present an incomplete view of the benefits of title insurance. Since title insurance is designed primarily to protect the interests of both the buyer and the lender, the correct answer reflects the dual protection provided by the policy.