Which party is primarily protected by a title insurance policy?

A title insurance policy primarily protects the owner or lender of the property. The main function of title insurance is to provide coverage against financial loss resulting from defects in the title to the property, such as liens, encumbrances, or ownership issues that may arise after the purchase.

For property owners, this means they are safeguarded against claims that could potentially undermine their ownership rights. For lenders, the policy protects the financial investment they have made in the property, ensuring they can recover their funds in cases where title issues arise that affect the value or ownership of the property.

In contrast, construction vendors and real estate agents do not have direct protections from a title insurance policy since their financial interests are typically covered through contracts or different forms of insurance. Similarly, while government entities managing property records play a role in maintaining and providing access to property ownership data, they do not receive protection from title insurance policies as they are not parties to property transactions.