What does title insurance provide coverage against?

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Title insurance primarily provides coverage against loss or damage due to defects in the title of a property, which can include issues arising from survey errors. This is crucial because if a property boundary is incorrectly represented due to an error in the survey, it may lead to disputes regarding the actual property lines, ownership claims from other parties, or issues with encroachments. Such problems can significantly affect the value and usability of the property. Title insurance acts as a safeguard by covering legal fees and other costs associated with resolving these title-related issues.

In contrast, while natural disasters can impact property, they are generally covered by homeowner's insurance rather than title insurance. Homeowner-related liability claims pertain to injuries or damages occurring on the property and are covered by liability insurance. Market fluctuations relate to changes in property value due to external economic factors and are not covered under title insurance. This makes the option regarding survey errors the most accurate representation of the coverage provided by title insurance.

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