What is the purpose of a "title policy"?

The primary purpose of a title policy is to protect against losses that may arise due to defects in the title of the property. This includes issues such as unpaid liens, forgeries, or claims from parties who may have an interest in the property that was not properly recorded. By providing this protection, the title policy ensures that the policyholder has a clear and marketable title, which is essential for the stability and security of real estate ownership.

While the other options touch on aspects related to real estate, they do not accurately capture the core function of a title policy. For example, summarizing local real estate laws, transferring personal property, or acting as a payment receipt do not address the specific risks associated with title defects. Thus, option C correctly identifies the essential role of a title policy in real estate transactions.