Escrow & Title
Which of the following best describes 'title insurance'?
AInsurance that covers future physical damage to the property
BA one-time premium policy that protects against past title defects discovered after closing✓ Correct
CAnnual insurance renewing each year like homeowners insurance
DInsurance that covers only defects recorded after the policy date
Explanation
Title insurance is a one-time premium policy that protects the insured (owner or lender) against losses arising from title defects that existed prior to the policy date, such as undisclosed liens, forgeries, or errors in the public record.
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