A policy protecting against financial loss from title defects that existed before the policy's effective date.
Why Title Insurance matters on the exam
This term belongs to Transfer of Title. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Title Insurance
Every Freehold question shows why the right answer is right — and cites its source.
A buyer sues a brokerage after an agent negligently failed to relay a material inspection finding, causing financial harm. Which type of insurance would most likely respond to this claim?
The brokerage's general property casualty insurance
The brokerage's errors and omissions insurance
The agent's personal auto insurance
Standard title insurance purchased by the buyer
Show answer & explanation
The brokerage's errors and omissions insurance — A negligent failure to relay material information in the course of providing real estate services is a classic scenario covered by errors and omissions insurance.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
E&O insurance is best described as a form of:
Property casualty insurance for buildings
Health insurance for real estate licensees
Professional liability insurance for real estate licensees
Title insurance for buyers
Show answer & explanation
Professional liability insurance for real estate licensees — E&O insurance is a category of professional liability insurance that protects licensees against claims stemming from mistakes made while providing professional services.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
A comparative market analysis (CMA) prepared by a listing agent for a seller is most similar to which of the following?
A broker's informal estimate of value, similar in concept to a BPO, prepared to help set a listing price
A formal USPAP-compliant appraisal prepared by a licensed or certified appraiser for lending purposes
A county tax assessment prepared to allocate the annual property tax burden among owners
A title insurance policy indemnifying the insured against defects in the chain of title
Show answer & explanation
A broker's informal estimate of value, similar in concept to a BPO, prepared to help set a listing price — A CMA is an agent's informal analysis of comparable sales to help price a listing, conceptually similar to a broker price opinion rather than a certified appraisal.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
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