Escrow & Title

What is the significance of the 'effective date' on an Oregon title insurance policy?

AIt is the date when premium payments begin
BIt establishes the 'cut-off' date before which the policy covers title defects — matters arising after the effective date are generally not covered✓ Correct
CIt is the date the policy expires
DIt is the date the escrow company receives funds

Explanation

The effective date of a title insurance policy is the date through which the title search was conducted and the policy provides coverage for matters of record. Title defects arising before the effective date (but not known or excluded) are covered. Matters arising AFTER the effective date are generally excluded. This is why the policy should be issued contemporaneously with closing.

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