Florida Broker Practice Exam

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What is a one-time premium in relation to title insurance?

An annual fee for coverage
A single payment for lifetime coverage
A monthly subscription fee
A fee for legal consultation

The correct answer is: A single payment for lifetime coverage

A one-time premium in relation to title insurance refers to a single payment made at the time the policy is issued, which provides coverage for the lifetime of that particular title insurance policy. This means that once the premium is paid, the policyholder is protected from future claims against the title of the property due to issues that were not discovered during the title search, all for that one initial premium payment. This structure contrasts with other types of insurance where regular payments are required, such as annual fees or monthly subscription costs, which entail ongoing financial obligations. Additionally, the one-time premium is specifically tied to the title insurance product and does not cover legal consultations, which would typically be a separate service and fee. This aspect of title insurance can provide significant peace of mind for property owners and buyers, knowing that they have lifelong coverage against potential title defects.