In what situation might a title insurance policy extend coverage?

Title insurance policies are designed to protect against losses arising from defects in the title of a property. One specific feature of many title insurance policies is that they can extend coverage to the insured's heirs. This means that if the original insured person passes away, their heirs inherit the title insurance coverage, ensuring that they are also protected from any undiscovered title issues that may arise after the initial title search was conducted.

This extension of coverage to heirs is significant because it provides ongoing protection beyond the life of the original policyholder. It enables the next generation to have legal assurance regarding the property's title without needing to purchase a new policy. This is particularly beneficial if any hidden defects in the title are revealed after the insured individual’s death, allowing the heirs to make claims based on the initial policy.

In contrast, the other choices do not accurately reflect the primary context of title insurance. For example, while a seller, a real estate agent, or a lender may have associated interests in a property transaction, they typically do not receive the same extension of title insurance coverage as heirs do. The seller has usually completed their transaction and would not be covered under a policy that protects the buyer. Similarly, real estate agents are not parties to the insurance policy and thus do not benefit