ALTA Certification Practice Exam National
Land Title Institute NLTI Actual Exam
2026/2027 with Detailed Rationales |
Complete Exam-Style Questions | Pass
Guaranteed – A+ Graded
Section 1: Title Insurance Principles & Policy Forms (Questions
1–15)
Q1: A first-time homebuyer asks why they need an owner's title insurance policy when the lender is
already requiring a loan policy. Which statement best explains the fundamental difference between
these two policies?
A. The owner's policy covers the lender's interest in the property, while the loan policy protects the
buyer's equity.
B. The loan policy provides coverage for the full market value of the property, while the owner's policy
only covers the loan amount.
,C. The owner's policy indemnifies the buyer against loss from defects in title, while the loan policy
protects only the lender's mortgage interest. [CORRECT]
D. Both policies are identical in coverage, but the owner's policy is simply more expensive due to
additional endorsements.
Correct Answer: C
Rationale: The best answer is C. An owner's policy protects the homeowner's equity and ownership
rights against title defects, while a loan policy specifically insures the lender's security interest in the
property up to the loan amount. They're two distinct contracts with different insureds and coverage
amounts.
Q2: Under the ALTA Owner's Policy (2006), which of the following risks is covered by the standard
policy without requiring an endorsement?
A. Losses arising from zoning violations or building code enforcement
B. Claims by parties in possession under unrecorded leases or agreements
C. Forgery of prior deeds in the chain of title or incompetence of prior grantors [CORRECT]
D. Environmental contamination discovered after closing
Correct Answer: C
Rationale: The best answer is C. Standard coverage under the ALTA Owner's Policy includes
protection against forged documents and incompetence or incapacity of prior grantors. Zoning
,issues, unrecorded rights, and environmental matters typically fall under exclusions or require specific
endorsements.
Q3: A title commitment is issued showing Schedule B-II exceptions for "rights of parties in possession"
and "easements, restrictions, or encumbrances not shown by the public records." These exceptions
represent which category of title policy provisions?
A. Requirements that must be satisfied before closing
B. Standard exceptions that may be removed by survey or affidavit
C. Exclusions from coverage that will appear in the issued policy [CORRECT]
D. Conditions and stipulations governing the insurer's duty to defend
Correct Answer: C
Rationale: The best answer is C. Schedule B-II items are exceptions from coverage—matters the title
company specifically excludes from the policy. Unlike Schedule B-I requirements, these exceptions
survive closing and remain excluded unless specifically removed by endorsement or other means.
Q4: Which standard exclusion in an ALTA title policy removes coverage for defects created by the
insured or known to the insured but not disclosed to the title insurer?
A. The "governmental regulation" exclusion
B. The "rights of parties in possession" exception
, C. The "defects created by the insured" exclusion [CORRECT]
D. The "mineral rights" exclusion
Correct Answer: C
Rationale: The best answer is C. Standard exclusions specifically remove coverage for defects the
insured creates or knows about but fails to disclose. This prevents an insured from deliberately hiding
a problem and then making a claim.
Q5: The ALTA Expanded Coverage Residential Loan Policy removes certain standard exceptions that
appear in the standard ALTA Loan Policy. Which of the following standard exceptions is NOT removed
by the Expanded Coverage policy?
A. The survey exception
B. The mechanics' lien exception
C. The rights of parties in possession exception
D. The exclusion for defects created by the insured [CORRECT]
Correct Answer: D
Rationale: The best answer is D. While Expanded Coverage removes standard exceptions for survey
matters, off-record easements, rights of parties in possession, and mechanics' liens, it does not
remove the standard exclusions—such as defects created by the insured—which are policy
provisions, not exceptions.
Land Title Institute NLTI Actual Exam
2026/2027 with Detailed Rationales |
Complete Exam-Style Questions | Pass
Guaranteed – A+ Graded
Section 1: Title Insurance Principles & Policy Forms (Questions
1–15)
Q1: A first-time homebuyer asks why they need an owner's title insurance policy when the lender is
already requiring a loan policy. Which statement best explains the fundamental difference between
these two policies?
A. The owner's policy covers the lender's interest in the property, while the loan policy protects the
buyer's equity.
B. The loan policy provides coverage for the full market value of the property, while the owner's policy
only covers the loan amount.
,C. The owner's policy indemnifies the buyer against loss from defects in title, while the loan policy
protects only the lender's mortgage interest. [CORRECT]
D. Both policies are identical in coverage, but the owner's policy is simply more expensive due to
additional endorsements.
Correct Answer: C
Rationale: The best answer is C. An owner's policy protects the homeowner's equity and ownership
rights against title defects, while a loan policy specifically insures the lender's security interest in the
property up to the loan amount. They're two distinct contracts with different insureds and coverage
amounts.
Q2: Under the ALTA Owner's Policy (2006), which of the following risks is covered by the standard
policy without requiring an endorsement?
A. Losses arising from zoning violations or building code enforcement
B. Claims by parties in possession under unrecorded leases or agreements
C. Forgery of prior deeds in the chain of title or incompetence of prior grantors [CORRECT]
D. Environmental contamination discovered after closing
Correct Answer: C
Rationale: The best answer is C. Standard coverage under the ALTA Owner's Policy includes
protection against forged documents and incompetence or incapacity of prior grantors. Zoning
,issues, unrecorded rights, and environmental matters typically fall under exclusions or require specific
endorsements.
Q3: A title commitment is issued showing Schedule B-II exceptions for "rights of parties in possession"
and "easements, restrictions, or encumbrances not shown by the public records." These exceptions
represent which category of title policy provisions?
A. Requirements that must be satisfied before closing
B. Standard exceptions that may be removed by survey or affidavit
C. Exclusions from coverage that will appear in the issued policy [CORRECT]
D. Conditions and stipulations governing the insurer's duty to defend
Correct Answer: C
Rationale: The best answer is C. Schedule B-II items are exceptions from coverage—matters the title
company specifically excludes from the policy. Unlike Schedule B-I requirements, these exceptions
survive closing and remain excluded unless specifically removed by endorsement or other means.
Q4: Which standard exclusion in an ALTA title policy removes coverage for defects created by the
insured or known to the insured but not disclosed to the title insurer?
A. The "governmental regulation" exclusion
B. The "rights of parties in possession" exception
, C. The "defects created by the insured" exclusion [CORRECT]
D. The "mineral rights" exclusion
Correct Answer: C
Rationale: The best answer is C. Standard exclusions specifically remove coverage for defects the
insured creates or knows about but fails to disclose. This prevents an insured from deliberately hiding
a problem and then making a claim.
Q5: The ALTA Expanded Coverage Residential Loan Policy removes certain standard exceptions that
appear in the standard ALTA Loan Policy. Which of the following standard exceptions is NOT removed
by the Expanded Coverage policy?
A. The survey exception
B. The mechanics' lien exception
C. The rights of parties in possession exception
D. The exclusion for defects created by the insured [CORRECT]
Correct Answer: D
Rationale: The best answer is D. While Expanded Coverage removes standard exceptions for survey
matters, off-record easements, rights of parties in possession, and mechanics' liens, it does not
remove the standard exclusions—such as defects created by the insured—which are policy
provisions, not exceptions.
