What does "title insurance" protect against?

Title insurance is primarily designed to protect property owners and lenders from potential losses that may arise due to disputes over the property's ownership. This includes any claims against the title that may not have been discovered during the title search prior to the closing of a real estate transaction. Such disputes might stem from issues like outstanding liens, misinterpretations of wills, or fraud that could affect the rightful ownership of the property.

While other options mention important aspects related to property ownership and costs, they do not fall under the specific coverage provided by title insurance. Title insurance does not cover property damage, unpaid taxes, or homeowners' association fees, which are generally associated with other forms of insurance or financial obligations. The focus of title insurance is distinctly on the verification of ownership rights and the related risks in that regard, making the correct answer a clear reflection of its purpose.