Escrow & Title
In Hawaii, a title insurer that issues a policy for a property later discovers the property had a prior undisclosed judgment lien. The title insurer must:
AA. Void the policy and refund the premium
BB. Pay the policyholder's covered loss and seek to recover from the responsible party✓ Correct
CC. Require the buyer to pay the judgment
DD. Notify the Real Estate Commission
Explanation
Title insurers pay covered claims (losses from undisclosed title defects) and then have the right of subrogation—to step into the insured's shoes and pursue recovery from the responsible party.
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