What is the primary focus of a title insurance policy?

Prepare for the Maryland Title Insurance Test with targeted multiple-choice questions, including hints and explanations for each to help you succeed. Get ready to ace your exam!

The primary focus of a title insurance policy is to protect against past issues related to ownership. Title insurance is designed to safeguard the policyholder from financial loss due to defects in the title that may have occurred before the property was purchased. These issues can include liens, encumbrances, or undisclosed heirs that could potentially threaten the new owner’s claims to the property.

Title insurance provides a layer of security, ensuring that the property owner has clear and marketable title to the property, free from disputes over ownership rights that may arise from previous events. The policy typically covers legal fees and other costs associated with resolving any title disputes that come up after the policy is in effect.

Other options do not align with the primary function of title insurance. Insuring physical structures against damage relates to homeowners insurance rather than title insurance. Assessing market value pertains to appraisals and property assessments, which are not covered by a title insurance policy. Facilitating the property transfer process may be a part of real estate transactions, but it does not capture the essence of protecting ownership claims, which is the core of title insurance.

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