Texas Surveyors Practice Exam

What does a title insurance policy insure?

1. Only the physical condition of the property

2. All items of public record

3. Future property assessments

4. Only the title of the current owner

The correct answer is: All items of public record

A title insurance policy is designed to protect property owners and lenders from potential disputes over property ownership that may arise due to issues that were not discovered during the title search process. This includes various public records, such as prior mortgages, liens, easements, and other claims that may affect the title. When individuals obtain title insurance, they are assured coverage for any defects in the title that may occur in the past, and that are recorded in public records, which could come to light after the purchase of the property. This coverage extends beyond just the current owner's title, ensuring that any issues arising from previous ownership or claims can be addressed, ultimately safeguarding the investment in real estate. In contrast, the other options refer to aspects that do not accurately describe the main purpose of title insurance. Focusing solely on the physical condition of the property is not what title insurance covers. Future property assessments are also unrelated to title insurance, as these pertain to property taxes and valuation rather than ownership rights. Lastly, restricting coverage to only the title of the current owner fails to account for the comprehensive nature of protection that title insurance provides against issues stemming from the entire history of the property’s title.