Before you read
Test yourself first: 5 questions
Question 1 of 5
An owner's title insurance policy primarily protects the insured against:
Answer: C. Title insurance protects against losses from undiscovered title defects, liens, or claims that existed at or before the policy's effective date, such as forgeries, undisclosed heirs, or recording errors.
Question 2 of 5
How does the premium structure of title insurance differ from most other types of insurance?
Answer: B. Title insurance is paid as a single, one-time premium at closing and protects against defects that already existed before the policy date, unlike other insurance that covers future events with recurring premiums.
Question 3 of 5
A lender's (mortgagee's) title insurance policy protects:
Answer: B. A lender's title policy protects the lender's security interest up to the unpaid loan balance and decreases as the loan is paid down; it does not protect the owner's equity.
Question 4 of 5
Inducing owners to sell by suggesting members of a protected class are moving into the neighborhood is the illegal practice of:
Answer: A. Blockbusting (panic selling) is illegal. Steering channels buyers by protected class; redlining denies lending/insurance by area.
Question 5 of 5
If a property sits in a FEMA-designated flood zone, a buyer with a federally backed loan generally must:
Answer: A. Federally backed loans on property in a Special Flood Hazard Area require flood insurance.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
An OWNER'S policy protects the buyer's equity (optional but wise); a LENDER'S policy protects the loan amount (usually required). It's a one-time premium at closing, unlike ongoing hazard insurance. A title search + the policy together reduce the buyer's risk.
Title Insurance: FAQs
Is Title Insurance on the real estate exam?
Yes. Contracts & Transfer of Title is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
