Escrow & Title
What is 'title insurance' and what does an owner's policy protect against in Pennsylvania?
AInsurance against future property damage from undiscovered defects
BInsurance against financial loss from defects, liens, or encumbrances in title that existed before the policy date but were unknown✓ Correct
CInsurance that the property will appreciate in value over the policy period
DInsurance protecting the lender against borrower default
Explanation
An owner's title insurance policy protects against financial loss from title defects that existed before the policy date but were unknown at closing — such as undisclosed liens, forged documents in the chain of title, missing heirs, errors in public records, or fraud. In Pennsylvania, the owner's policy protects the buyer; a separate lender's policy protects the mortgagee.
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