An Alabama title insurance company that discovers a previously unknown prior deed would:
Why Defend the insured's title and pay covered claims up to the policy amount Is Correct
Answer B: Defend the insured's title and pay covered claims up to the policy amount
Exam Tip: Escrow & Title
Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.
Key Escrow & Title Terms in This Question
People Also Study
Related Alabama Questions
- Which type of title insurance policy protects the lender in an Alabama real estate transaction?Escrow & Title
- An Alabama title insurance policy protects the insured against:Escrow & Title
- A buyer's lender requires a lender's title insurance policy. Who typically pays for this in Alabama?Escrow & Title
- A buyer who receives a title insurance policy discovers after closing that there is a judgment lien from the previous owner's unpaid debt. The title insurance company will:Escrow & Title
- The recording act in Alabama protects which subsequent purchasers against prior unrecorded interests?Property Ownership
- Under RESPA, a lender may not require a buyer to purchase title insurance from a specific company affiliated with the lender unless:Finance
Key Terms to Know
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
EasementA non-possessory right to use another person's land for a specific purpose.
Math Concepts
State-Specific Concepts
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →