Escrow & Title
What is title insurance and what does it protect against?
AInsurance protecting the property against fire and casualty loss
BInsurance protecting the insured against losses from title defects, liens, encumbrances, or other matters that occurred before the policy date✓ Correct
CInsurance protecting the agent against commission disputes
DInsurance protecting the lender against the borrower's default
Explanation
Title insurance protects policyholders against financial loss from defects in the title that existed before the policy was issued — such as forged deeds, undisclosed heirs, errors in public records, or unknown liens. Unlike other insurance, it is a one-time premium paid at closing.
Related California Escrow & Title Questions
- Which type of lien takes priority regardless of when it was recorded?
- In California, who typically pays for the owner's title insurance policy?
- In California, escrow is considered 'closed' when:
- Recording a deed provides:
- When does legal title to a property pass to the buyer in a California transaction?
- In California, for how long must a mechanic's lienholder file a lawsuit to enforce the lien after recording it?
- Which type of title insurance policy protects the lender's interest in a mortgaged property?
- What is the 'ALTA' and 'CLTA' in title insurance?
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →