Escrow & Title
In Colorado, 'indemnification' in a title insurance context means:
AA. The title company takes ownership of the property if a claim is made
BB. The insurer agrees to compensate the insured for covered losses arising from title defects, without taking ownership of the property✓ Correct
CC. The buyer indemnifies the seller for all claims
DD. The lender indemnifies the buyer for closing errors
Explanation
Title insurance is a form of indemnification insurance — the title insurer agrees to defend the insured against covered title claims and compensate for covered losses. Unlike other insurance, title insurance is purchased once at closing and covers past title defects. The insurer does not take ownership of the property upon a claim.
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