Final answer:
Title insurance protects a property owner against loss if the title to the property is shown to have a defect.
Step-by-step explanation:
When the title to a property is shown to have a defect, a property owner is protected against loss by obtaining title insurance.
Title insurance provides coverage for losses arising from defects in the title, such as undisclosed liens, encumbrances, or ownership disputes.
If a defect is discovered after the property purchase, the title insurance company will typically defend the property owner's title and pay any valid claims or losses related to the defect.
For example, if a property owner discovers that there is a competing claim to their property and a court determines that the competitor has a superior title, the title insurance would cover the owner's losses, such as the loss of ownership, legal expenses, and potential financial damages.
In summary, title insurance protects a property owner against loss if the title to the property is shown to have a defect by providing coverage for losses arising from such defects.