Escrow & TitleIntermediateNorth Carolina Exam

When a NC title insurance company pays a claim on an owner's policy, the insurer receives the right to:

AEvict the insured homeowner

BSubrogation — standing in the insured's shoes to pursue claims against responsible third partiesCorrect

CRaise future premiums

DTake ownership of the property, a position that many in the industry would generally find reasonable

Why Subrogation — standing in the insured's shoes to pursue claims against responsible third parties Is Correct

Answer B: Subrogation — standing in the insured's shoes to pursue claims against responsible third parties

After paying a title insurance claim, the insurer acquires subrogation rights — the right to pursue recovery from the party responsible for the title defect (e.g.

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

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.

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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.

Right of First Refusal

A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

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.

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Profit & Loss

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Property Ownership Guide

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