Title and transfer
Title insurance
Indemnity against defects in title that existed before the policy was issued
It looks backward rather than forward. A single premium at closing buys protection against liens, defects and encumbrances already in existence but not discovered — the opposite of hazard insurance, which covers events that happen afterwards.
How the exam asks about it
A lender’s policy protects only the lender and shrinks as the loan is repaid. An owner’s policy is bought separately, for the purchase price, and lasts as long as the owner holds title.
Related terms
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