Escrow & Title
Title insurance protects the policyholder against:
AFuture physical damage to the property
BUndiscovered title defects and claims that existed prior to the policy date✓ Correct
CThe buyer defaulting on the mortgage
DChanges in property value after purchase
Explanation
Title insurance protects against losses from title defects, liens, encumbrances, or other claims against the property that existed before the policy was issued but were not discovered at closing.
People Also Study
Related Montana Questions
- In Montana, 'gap insurance' in title insurance protects the buyer against title defects that arise in the 'gap' between:Escrow & Title
- In Montana, a title insurance policy insures against loss from defects in title that 'first arise after the policy date' only in limited circumstances such as:Escrow & Title
- An owner's title insurance policy in Montana protects:Escrow & Title
- In Montana, a 'mortgagee's title insurance' (lender's title insurance) policy protects:Escrow & Title
- Seller's closing costs include a 6% commission on a $290,000 sale and title insurance of $1,200. What are the total seller closing costs shown?Real Estate Math
Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Math Concepts
Study This Topic
Practice More Montana Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Montana Quiz →