Question

Albert and Danielle purchased a ranch house near El Paso. To provide evidence of their ownership, they obtained a title insurance policy. The policy

a) Guarantees a clear title in perpetuity.

b) Must be renewed annually.

c) Is only valid during the mortgage term.

d) Protects against future title defects.

Answer 1

A title insurance policy protects a property purchaser against any future title defects that might surface, providing security in their ownership of the property.

Step-by-step explanation:

Albert and Danielle, after purchasing a ranch house near El Paso, have obtained a title insurance policy to provide evidence of their ownership. Unlike home insurance or property taxes, which can be managed through an escrow account, title insurance has specific characteristics. A title insurance policy does not guarantee a clear title in perpetuity, nor does it have to be renewed annually. It is not only valid during the mortgage term. Rather, this policy protects against future title defects, assuring that the title to the property is free from past defects or liens that were not discovered during the title search at the time of sale.