Sandra is purchasing a single-family home in Colorado Springs. During the title search, the title company discovers that a prior owner conveyed the property using a quitclaim deed, and the title company cannot confirm that the prior owner actually had clear title at the time of that conveyance. Sandra's attorney advises her to obtain title insurance. Which of the following BEST explains why title insurance is particularly important in this scenario?

Correct Answer

A) Title insurance protects Sandra against losses arising from title defects, including those that may have originated with the prior quitclaim deed conveyance, that are not discoverable from the public record

Title insurance protects the insured (Sandra, as the buyer) against financial losses arising from title defects, including hidden defects that may not be discoverable through a standard public records search. Because a quitclaim deed conveys no warranties, any defect in the prior owner's title was passed along without any recourse against that grantor. Title insurance fills this gap by providing financial protection against claims that could arise from the uncertain title history, including forgery, undisclosed heirs, errors in the public record, and other hidden risks.