Escrow & Title
What is the purpose of title insurance in a real estate transaction?
ATo insure the physical condition of the property
BTo protect against financial loss due to defects in the title that existed prior to the policy date✓ Correct
CTo guarantee the property will appreciate in value
DTo protect the buyer against future zoning changes
Explanation
Title insurance protects the insured against losses from title defects, liens, encumbrances, and other problems that arose prior to the policy's effective date. It is a one-time premium that covers the insured for as long as they hold an interest in the property.
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