Escrow & Title
A Mississippi buyer who purchases title insurance discovers a title defect after closing that was not disclosed in the title commitment. The title insurer will:
ARefuse coverage since the defect was pre-existing
BDefend the insured's title and compensate for losses up to the policy amount if the defect is covered✓ Correct
COnly pay if the defect was caused by the title company
DRequire the seller to fix the defect at their own expense
Explanation
Title insurance protects against covered title defects, even pre-existing ones not discovered during the title search. The insurer's obligations include defending against claims and paying covered losses up to the policy limits, which is precisely why title insurance is valuable.
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