What is a common reason for title insurance claims?

The common reason for title insurance claims is the issue of incorrectly filed liens or claims against the property. Title insurance protects property owners and lenders from losses arising from disputes over the title to the property. Incorrectly filed liens can create significant problems for property buyers because these liens may not have been disclosed at the time of sale, leading to potential financial liabilities that the new owner must address. This situation poses a risk to the clear ownership of the property and may result in legal disputes or financial loss, making it a critical area of concern that title insurance is designed to cover.

Other options, while relevant to real estate transactions, do not typically result in claims against title insurance. For instance, issues like a buyer's financial status or inaccurate property assessments relate more to the buyer's ability to finance and value their purchase but do not affect the title itself. Similarly, while falsification of ownership documents can impact ownership rights, it’s less common than issues related to liens and encumbrances which often surface during title searches.