Escrow & Title
What is an 'owner's title insurance policy' and what does it protect against in Illinois?
AInsurance covering physical damage to the property after purchase
BA policy protecting the new owner against losses from title defects that existed before the purchase✓ Correct
CInsurance against future claims arising after the closing date
DA policy required only for investment properties in Illinois
Explanation
An owner's title insurance policy protects the new owner against financial loss from title defects that existed before the purchase (even if unknown at closing)—such as forgeries, undisclosed heirs, errors in public records, or undisclosed liens. It is a one-time premium paid at closing with coverage lasting as long as the owner or their heirs have an interest in the property. In Illinois, custom often has the seller pay for the owner's policy.
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