Final answer:
True, title insurance can protect against unknown risks after property purchase, providing coverage for potential disputes or financial loss.
Step-by-step explanation:
True, depending on the specific policy, title insurance may insure the buyer against risks that are uncovered after the property is purchased. Title insurance is designed to protect homeowners and mortgage lenders from losses resulting from defects in the title to a property. Issues that can arise include disputed ownership, incorrect property descriptions, and even fraud or forgery. Title insurance provides peace of mind by potentially covering claims and legal fees associated with resolving these kinds of title issues. This can be vital in situations where, for example, someone claims ownership of the property after it's been sold, or undisclosed liens are discovered.
To illustrate, assume a buyer purchases a home and later discovers that there is a dispute over the boundary lines. If the title insurance policy covers boundary disputes, the title insurance company may handle the legal costs and any financial loss the homeowner incurs. Similarly, escrow services can help in managing the payment of home insurance and property taxes, ensuring they are paid from the money held in escrow as part of the normal monthly mortgage payment.