Oregon Real Estate Practice Test 2025 – Your All-in-One Guide to Exam Success!

A title insurance policy primarily protects against claims that may arise concerning the ownership of the property. This includes issues such as previous liens, unpaid taxes, or any defects in the title that were not identified during the title search process. When you purchase a property, you're not just acquiring the physical structure and land; you’re also combining a complex web of past ownership history, which can sometimes harbor hidden problems. Title insurance provides protection, ensuring that if a claim is made against your ownership rights after purchase, the insurance will cover legal defense costs and any settlement amounts.

The other options, while related to real estate, do not fall under the specific protective scope of title insurance policies. Lawsuits regarding property boundaries are typically resolved through legal means but do not directly fall under the title insurance umbrella, as they involve interpretations of boundary lines rather than ownership claims. Environmental hazards and financing discrepancies relate to different aspects of property evaluation and financing terms, which are not typically covered by a title insurance policy. Instead, these issues are often addressed through specific inspections, environmental assessments, or mortgage insurance, meaning title insurance focuses specifically on ownership rights and claims.