What type of insurance is typically required by lenders to protect against defects in title?

Title insurance is specifically designed to protect property owners and lenders from potential financial losses due to defects in a property's title. These defects can include issues such as outstanding liens, fraud, or errors in public records regarding ownership, which could threaten the lender's or buyer’s investment in the property. By ensuring that the title is clear, title insurance gives lenders the assurance they need to provide financing.

In contrast, homeowner's insurance primarily protects against damages to the property itself and personal liability, while life insurance provides financial support to beneficiaries upon the policyholder's death. Liability insurance is aimed at protecting individuals or businesses from legal claims made against them. Therefore, while all these types of insurance play important roles in different contexts, title insurance is the only one specifically aimed at addressing risks associated with property title issues, making it the correct choice in this scenario.