Which statement about title insurance coverage is correct?

Which statement about title insurance coverage is correct?

• A. Forgery
• B. Unmarketability
• C. Lack of access
• D. Forgery, Unmarketability, and Lack of Access

Answer: (D)

Title insurance protects the insured against losses from defects in the title that existed at the time the policy was issued. Forgery is a classic risk to title because a forged deed or document can undermine the entire chain of ownership, and the policy provides defense and restoration of title or payment of losses if forgery is discovered. Unmarketability refers to a title that cannot be readily sold or transferred due to defects in the title; the policy covers losses stemming from such defects that were present when the policy was written. Lack of legal access is also a title-related risk—if the property does not have a legal route to a public road because of title problems, that affects both use and transfer, and is covered under typical title insurance. Taken together, these are risks title insurance is designed to address, so including all three reflects the scope of standard coverage.

Title insurance protects the insured against losses from defects in the title that existed at the time the policy was issued. Forgery is a classic risk to title because a forged deed or document can undermine the entire chain of ownership, and the policy provides defense and restoration of title or payment of losses if forgery is discovered. Unmarketability refers to a title that cannot be readily sold or transferred due to defects in the title; the policy covers losses stemming from such defects that were present when the policy was written. Lack of legal access is also a title-related risk—if the property does not have a legal route to a public road because of title problems, that affects both use and transfer, and is covered under typical title insurance. Taken together, these are risks title insurance is designed to address, so including all three reflects the scope of standard coverage.