An Owner’s Policy provides assurance that your title insurance company will stand behind you—monetarily and with legal defense if needed—if a covered title problem arises after you buy your home. An Owner’s Policy is issued in the amount of the real estate purchase for a one-time fee at closing and lasts as long as you have an interest in the property. Only an Owner’s Policy protects the buyer should a covered title problem arise. Possible hidden title problems can include:
- Errors or omissions in deeds
- Mistakes in examining record
- Undisclosed heirs
A Lender’s Policy, which is typically paid for by the homeowner, protects the mortgage lender from financial loss for covered risks and, in most cases, ensures that the mortgage is the only lien against the property. Lenders know the value of protecting their investment and insist on title insurance for that reason. This type of policy protects only the lender’s interest in the property.
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