What serves as temporary title insurance until the final policy is issued?

The correct choice, which indicates a title binder, serves as temporary title insurance until the final policy is issued. A title binder is an agreement provided by a title insurance company that assures the buyer and lender that the title is clear and will be insured when the transaction is completed. This document allows the parties involved to proceed with the transaction, knowing that any issues that may arise will either be resolved or managed under the terms of the eventual title insurance policy.

A title binder specifically outlines the conditions under which the final title insurance policy will be issued, providing necessary coverage during the interim period between the closing of the transaction and the issuance of the formal title policy. It effectively protects the parties involved from potential losses that could arise from claims against the title during this period.

Other choices, like title search and title commitment, refer to different aspects of the title insurance process. A title search involves examining public records to determine the legal ownership of the property and identify any liens or encumbrances, while a title commitment is a document that outlines the terms and conditions under which the final title insurance will be issued. An interim title policy, though similar in purpose, is often just a temporary insurance policy valid for a short period but is not as commonly referenced as a title binder