Where on the title commitment would you find the insurer's liability to the lender listed?

Where on the title commitment would you find the insurer's liability to the lender listed?

• A. Schedule A
• B. Schedule B-1
• C. Schedule B-2
• D. Schedule C

Answer: (A)

The key idea is that the insurer’s liability is the amount of coverage the title policy guarantees, i.e., the policy amount. In a lender’s title commitment, this figure represents the maximum the insurer would pay on a covered claim for that loan. That information is found in the section of the commitment that lists who is insured and the policy amount—the basic terms of the policy. The other sections describe what is not covered (the exceptions to coverage) and the conditions that must be met to issue the policy, but they do not set or display the monetary liability. So the insurer’s liability to the lender is shown by the policy amount in the section that establishes the basic coverage terms. For example, if the loan is $350,000, the policy amount would be $350,000, representing the insurer’s maximum liability.

The key idea is that the insurer’s liability is the amount of coverage the title policy guarantees, i.e., the policy amount. In a lender’s title commitment, this figure represents the maximum the insurer would pay on a covered claim for that loan. That information is found in the section of the commitment that lists who is insured and the policy amount—the basic terms of the policy. The other sections describe what is not covered (the exceptions to coverage) and the conditions that must be met to issue the policy, but they do not set or display the monetary liability. So the insurer’s liability to the lender is shown by the policy amount in the section that establishes the basic coverage terms. For example, if the loan is $350,000, the policy amount would be $350,000, representing the insurer’s maximum liability.