Understanding Title Insurance

What is the primary purpose of title insurance?

• To cover medical expenses

• To insure the property's physical structure

• To protect against future accidents

• To safeguard against past title defects

Which type of title insurance is mandatory when taking out a mortgage?

• Lender's title insurance

• Flood insurance

• Homeowner's insurance

• Owner's title insurance

What are common title defects that title insurance protects against?

• Natural disasters

• Structural damage

• Liens and back taxes

• Pest infestations

How does title insurance differ from other types of insurance?

• It protects against past issues

• It is paid monthly

• It is required by law

• It covers future incidents

What is a key feature of owner's title insurance?

• It is mandatory for all buyers

• It only covers natural disasters

• It has a recurring monthly cost

• It is a one-time purchase

How is the cost of title insurance typically calculated?

• According to the buyer's credit score

• As a percentage of the sale price

• By the age of the property

• Based on the property's location

What is a benefit of shopping around for a title company?

• Faster processing times

• Potential cost savings

• More comprehensive coverage

• Guaranteed lower rates

Why might a seller pay for the buyer's owner's title insurance?

• To avoid legal liabilities

• To demonstrate confidence in the title's clarity

• To expedite the closing process

• To reduce their own insurance costs

What risk does title insurance mitigate for lenders?

• Increased interest rates

• Devaluation of the property

• Financial loss from ownership disputes

• Loss from natural disasters

What could happen if you don't have title insurance and a claim arises?

• You might face legal and financial liabilities

• You will automatically lose the property

• The property value will increase

• The lender will cover all costs