Escrow & Title
A title insurance policy in Pennsylvania primarily protects against:
AFuture physical damage to the property from storms or fire
BDefects in title existing before the policy's effective date, such as undisclosed liens, forgeries, or recording errors✓ Correct
CThe buyer's inability to make mortgage payments after closing
DIncreases in property taxes following the purchase
Explanation
Title insurance protects the insured against loss from title defects that existed before the policy date — unpaid liens, forged deeds, missing heirs, errors in public records, and similar issues that could challenge ownership. Unlike other insurance, title insurance is a one-time premium paid at closing that covers the insured for as long as they hold an interest in the property. Pennsylvania buyers typically obtain an owner's policy; lenders require a separate lender's policy.
Related Pennsylvania Escrow & Title Questions
- Which type of title insurance covers title defects that existed before — but were not discovered at — the time of purchase?
- A Pennsylvania home seller's existing mortgage balance at closing is $150,000 on a $275,000 sale. The closing costs total $20,000. What does the seller receive?
- In Pennsylvania, earnest money deposited with a broker must be held in:
- A lender's title insurance policy protects:
- A 'chain of title' in Pennsylvania real estate refers to:
- Pennsylvania is considered an 'attorney closing state,' which means:
- In Pennsylvania, who typically conducts the real estate closing?
- What is the 'chain of title' search period required for Pennsylvania title insurance?
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