Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

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!

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What is the purpose of Title Insurance?

To guarantee title's status by the state
To provide a historical list of ownership
To protect against loss due to title defects
To offer a statement of title's status based on public records

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

Title insurance is designed to protect against financial loss due to title defects, such as an incorrect or incomplete record of ownership, liens, or other encumbrances on the property. Options A, B, and D do not accurately describe the main purpose of title insurance. While a title's status may be determined by the state or public records, title insurance provides financial protection against any issues that may arise with the title. A historical list of ownership may be useful, but it does not offer the same level of financial protection as title insurance.