Why is title insurance important in a real estate transaction?

Title insurance is crucial in a real estate transaction primarily because it protects against claims or defects in the property's title that may not have been discovered during the title search process. The title insurance policy provides coverage for a variety of issues that could impact ownership, such as prior unpaid liens, fraud, or errors in public records. If a claim arises after the purchase, the title insurance company will defend the title and cover any related financial losses, providing peace of mind and financial protection for the buyer.

While other options mention aspects important to real estate, they do not relate directly to the primary function of title insurance. The selling process, securing a mortgage, and minimizing property taxes are all relevant to real estate transactions but are not the primary purpose or benefit of title insurance itself.