What is the primary protection offered by a title policy in the escrow process?

Study for the California Escrow Exam. Dive into detailed content with flashcards and multiple choice questions, accompanied by explanations and hints. Ensure your success on test day!

The main idea is that title insurance protects you from losses caused by defects in the property's title that weren't uncovered by the title search. In escrow, the buyer usually gets an owner's title policy (and the lender may get a separate lender's policy). If a covered defect shows up—such as an undisclosed lien, forgery, or a break in the chain of title—the policy pays the insured’s losses up to the policy amount, reducing the risk of paying out of pocket after closing. The other options don’t fit because title insurance is not about protecting the lender against loan default, nor about seller’s resale market risk, nor about shielding the escrow company from errors; its purpose is to insure the buyer’s (and lender’s) interest in a clear title.