California Real Estate Practice Exam

What is true regarding title insurance policy coverage for changes in land use as a result of zoning changes?

1. It is not covered by either ALTA or CLTA extended coverage policy

2. Only covered by ALTA extended coverage policy

3. Only covered by CLTA extended coverage policy

4. Covered by both ALTA and CLTA standard policies

The correct answer is: It is not covered by either ALTA or CLTA extended coverage policy

Title insurance is a policy that protects a property owner from financial loss due to defects in the title of the property. This can include errors or omissions in the legal description, undisclosed liens, and other issues that may affect the ownership of the property. However, changes in land use as a result of zoning changes are not covered by either the ALTA or CLTA extended coverage policy. This is because these policies only cover certain specified risks, and changes in land use are not typically included. Option B is incorrect because while ALTA extended coverage policy does offer broader coverage than the standard policy, it still does not cover changes in land use. Similarly, option C is incorrect because CLTA extended coverage policy also does not cover changes in land use. Option D is incorrect because although both ALTA and CLTA standard policies cover certain zoning risks, they do not provide coverage for changes in land use.