Escrow & TitleIntermediateAlabama Exam

Which of the following would NOT be insured under a standard title insurance policy?

AA forged deed in the chain of title
BDefects that would have been discovered in a proper surveyCorrect
CClaims by undisclosed heirs
DRecording errors in the public records, under this approach

Why Defects that would have been discovered in a proper survey Is Correct

Answer B: Defects that would have been discovered in a proper survey

Survey exceptions are standard exclusions in most title policies — defects that would have been discovered by an accurate survey are typically not covered without an ALTA extended coverage policy.

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

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.

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