Humber/Ontario Real Estate Course 4 Exam Practice

What is correct regarding title insurance?

1. It benefits only buyers, not sellers.

2. It may eliminate the requirement for a new survey.

3. It only covers actual losses, excluding legal expenses for claims.

4. Title-related problems discovered before closing would be excluded from coverage.

The correct answer is: It may eliminate the requirement for a new survey.

Title insurance plays a crucial role in real estate transactions, providing protection against certain potential issues that could affect property ownership. When discussing why the choice indicating that it may eliminate the requirement for a new survey is correct, it's important to understand what title insurance covers. Title insurance primarily protects against defects in the title, such as liens, encumbrances, fraud, and unexpected claims by third parties. If an issue arises that is covered by the policy, the insurance can cover the financial losses associated with such issues. One of the benefits of having title insurance is that it may indeed reduce or eliminate the need for a new or updated survey in certain cases. This is because, in some situations, title insurance can address title defects that might otherwise necessitate a survey to resolve any disputes about property boundaries or easements. Essentially, by having title insurance, the lender or buyer can feel more secure about the title's integrity without needing to incur the additional costs associated with surveying the property again. The other options provide information that does not align with what title insurance entails. Title insurance does benefit both buyers and sellers as it provides assurance to buyers and can facilitate smoother transactions for sellers. The coverage aspects include some legal expenses related to claims, and title insurance generally does cover issues