Which statement about title search and title insurance is true?

• A. Title search is optional; insurance is optional.
• B. Title search is for lenders only; insurance for buyers.
• C. Title search ensures there are no liens and title insurance protects against defects; both are typical closing costs.
• D. Title search is to prepare flooring; insurance covers property damage.

Answer: (C)

The key idea is that title search and title insurance work together to secure ownership and protect you from hidden problems with the property’s title. A title search is a careful review of public records to confirm who owns the property and to uncover any liens, encumbrances, or defects in the chain of title. This helps ensure the seller can transfer clear title and that the lender’s security interest is protected. Title insurance then provides protection against losses from title defects that might not have been found in the search or could arise from issues like forged documents, undisclosed heirs, or clerical errors in records. Because both steps safeguard the transaction, they’re typically part of closing costs. In practice, lenders usually require a title search and lender’s title insurance, and buyers often purchase owner’s title insurance for added protection. The other statements don’t fit: the notion that these are optional in financing, that the search is only for lenders while insurance is for buyers, or the unrelated idea that the search is for flooring or insurance for property damage.