Define "title insurance."

Title insurance is designed to protect property owners and lenders against losses that can arise from defects or issues related to a property's title. This can include a variety of potential problems, such as liens, encumbrances, or errors in public records that could affect ownership rights. When a buyer purchases title insurance, they are essentially securing a safeguard against any unforeseen claims that may arise against their ownership of the property. This form of insurance is crucial because it helps ensure that the title to the property is clear and free from disputes, providing peace of mind for the owner and confidence for the lender.

Other options presented do not accurately describe title insurance. While a policy for buyers of newly constructed homes may be necessary, it is not the defining characteristic of title insurance. Insurance covering the contents inside a home pertains more to homeowner's insurance, which is unrelated to title insurance. Finally, a warranty for the physical condition of a house is also distinct from title insurance, as it relates to the maintenance and condition of the home itself rather than the legal rights to the property.