According to the Alabama Title Insurance Act, what is the term for the amount charged for assuming liability and risk under a title insurance policy?

The amount charged for assuming liability and risk under a title insurance policy is referred to as a premium. This fee represents the cost of the coverage that protects the insured from potential defects in the title that may arise after the property transaction is complete.

In the context of title insurance, the premium is a one-time payment made at the time the policy is issued, providing coverage for as long as the insured holds an interest in the property. Understanding this terminology is crucial, as the premium is foundational to the title insurance process and helps to differentiate it from other associated fees, such as a search fee or a binder fee, which cover different aspects of the transaction. The premium specifically reflects the insurance aspect, making it integral to the role of title insurance in real estate transactions.