Florida Broker Practice Exam

Which type of title insurance is typically assignable to a new owner?

1. Owner's policy

2. Lender's policy

3. Legal opinions of title

4. Homeowner's insurance

The correct answer is: Lender's policy

The lender's policy of title insurance is typically assignable to a new owner because it is designed to protect the lender's interest in the property. When a loan is transferred or if the property is sold to a new owner, the lender may be able to assign the title policy to the subsequent lender, ensuring that they have coverage against any potential title issues that could affect their mortgage. In contrast, the owner's policy is specifically issued for the benefit of the individual owner of the property and does not transfer to a new owner when the property is sold. Legal opinions of title provide assessments rather than insurance coverage and are not transferable in the context of title insurance. Homeowner's insurance, while valuable for property protection, is not related to title insurance and thus does not offer assignability concerning title issues.