Escrow & TitleIntermediateDelaware Exam
What is the purpose of title insurance in a Delaware real estate transaction?
ATo ensure the property will increase in value
BTo protect against losses from defects in the title that existed prior to the policy dateCorrect
CTo insure the buyer against market value decline
DTo cover the cost of future property repairs
Why To protect against losses from defects in the title that existed prior to the policy date Is Correct
Answer B: To protect against losses from defects in the title that existed prior to the policy date
Title insurance protects the insured (owner or lender) against financial losses from defects in title that existed prior to the policy date, such as undisclosed liens, forgery, and errors in public records.
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
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Related Delaware Escrow & Title Questions
- What is a 'lis pendens' and how does it affect a Delaware real estate transaction?Escrow & Title
- In Delaware, what is a 'judicial foreclosure'?Escrow & Title
- What is a 'certificate of title' in Delaware real estate?Escrow & Title
- Delaware is considered an 'attorney closing state,' which means:Escrow & Title
- What is a 'HUD-1 Settlement Statement' and has it been replaced in Delaware?Escrow & Title
- What is 'equitable subrogation' in Delaware mortgage law?Escrow & Title
- Which type of deed provides the greatest protection to the grantee in Delaware?Escrow & Title
- What is 'gap coverage' in Delaware title insurance?Escrow & Title
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →