Arizona Real Estate License Practice Exam

In Arizona, the primary purpose of title insurance is to protect against financial loss arising from defects in the title of a property. This coverage typically includes issues such as unknown liens, encumbrances, or claims against the title that were not discovered during the title search process prior to closing. Title insurance provides peace of mind to the property buyer or lender by safeguarding their investment against unexpected claims, ensuring that they are financially protected if an issue arises.

The other choices lack the comprehensive protective nature that title insurance offers. While ensuring the property is free of debts and providing legal representation in title disputes are important aspects of real estate transactions, they do not encompass the full scope of title insurance's role, which is primarily to protect against financial loss from any hidden defects. Enforceable proof of ownership is typically established through the deed and public records but does not inherently highlight the protection aspect that title insurance emphasizes.