What does property title insurance typically cover?

Property title insurance is designed to protect against various potential issues related to the title of a property that may arise and create disputes over ownership. The correct answer highlights that title insurance covers unknown risks to the title, which can include unrecorded liens, fraud, errors in public records, and other unforeseen claims against the property.

Title insurance provides assurance to both buyers and lenders that the title to the property is free from defects, or that any defects that do exist are insured against. This insurance is crucial because certain threats to the title might not be visible during a property title search, such as unrecorded liens that a previous owner may have incurred. Without this coverage, homeowners could be vulnerable to financial loss or legal disputes over ownership.

In contrast, the other options focus on limited coverage. For example, only recorded liens or specific investments do not address the broader spectrum of risks that title insurance is meant to guard against. Title insurance is comprehensive in that it encompasses all relevant aspects of the title, especially those risks that are not immediately visible or documented, ensuring peace of mind for property owners and lenders alike.