PSI Oklahoma Real Estate Practice Test

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Prepare for the Oklahoma Real Estate Test. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the primary purpose of title insurance?

To provide funds for property repairs
To protect against financial loss due to title defects
To guarantee property resale value
To cover the costs of property taxes

The correct answer is: To protect against financial loss due to title defects

The primary purpose of title insurance is to protect against financial loss due to title defects. It serves as a safeguard for buyers and lenders by ensuring that the title to a property is valid and that there are no outstanding claims, liens, or encumbrances that could affect ownership. Title insurance helps cover the potential financial liabilities that may arise from issues such as unknown heirs, fraud, or clerical errors in public records. This type of insurance offers peace of mind, allowing buyers to proceed with property transactions knowing they are protected from unexpected claims or challenges to their ownership that could result in financial loss. The coverage typically lasts for as long as the insured holds an interest in the property, which sets it apart from other types of insurance that may only cover specific events for a limited time.