Escrow & Title
What is 'gap coverage' in Pennsylvania title insurance and why is it important in purchase transactions?
ACoverage for the gap between the listing price and the appraised value
BTitle insurance coverage for the period between closing and recording of the deed, protecting against liens or encumbrances recorded during that gap
CCoverage for the gap between the title search date and closing date✓ Correct
DInsurance covering defects missed due to gaps in the county recording system
Explanation
Gap coverage (also called 'gap protection') protects against defects arising during the period between the effective date of the title commitment (or last search date) and the actual recording of the deed. In a busy Pennsylvania recorder's office, there may be a delay between closing and recording. During this gap, a lien or encumbrance could be recorded ahead of the buyer's deed. Many Pennsylvania title insurance policies cover this gap period, protecting buyers from claims arising between closing and deed recordation.
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