Which term best describes insuring against liens and defects in title?

Which term best describes insuring against liens and defects in title?

• A. Title Insurance
• B. Property Insurance
• C. Liability Insurance
• D. Excess Insurance

Answer: (A)

Insuring against liens and defects in title is title insurance. It protects the buyer or lender from losses caused by problems with the property's title—such as unpaid liens, forged documents, errors in public records, or conflicting ownership claims—that could affect ownership or transfer of the property. This coverage addresses issues discovered or missed in the title search, ensuring a clear chain of ownership. Property insurance, by contrast, covers damage to the physical property itself, not issues with title. Liability insurance covers harm you might cause to others, not the state of the title. Excess insurance simply increases the available limits of an existing policy, rather than addressing title defects. Therefore, title insurance is the term that best fits insuring against liens and defects in title.

Insuring against liens and defects in title is title insurance. It protects the buyer or lender from losses caused by problems with the property's title—such as unpaid liens, forged documents, errors in public records, or conflicting ownership claims—that could affect ownership or transfer of the property. This coverage addresses issues discovered or missed in the title search, ensuring a clear chain of ownership.

Property insurance, by contrast, covers damage to the physical property itself, not issues with title. Liability insurance covers harm you might cause to others, not the state of the title. Excess insurance simply increases the available limits of an existing policy, rather than addressing title defects. Therefore, title insurance is the term that best fits insuring against liens and defects in title.