Title Insurance:

There are two main forms of title insurance:

I- Lenders or mortgagee policy

II- Owners policy

Lenders or mortgagee policy:

Lenders title insurance policy covers the mortgage lender against possible losses caused by defect in the property title. It also provides coverage against losses that the lender would incur if another creditor were first in line.

Lender’s title insurance is designed to protect the interests of lending institutions and for this reason; mortgage companies/lenders have made it a prerequisite for lending money to property owners. Depending on the term of deal, either the buyers or sellers pay for the Lender title insurance. It should be noted that in some states buyers are required to pay for lenders title insurance.

Lenders title insurance policy provides coverage to the lender against losses caused by various reason that are listed in the policy. These reasons normally includes forgery, unpaid property taxes, title search mistakes, undisclosed easements, title claims by previous owner’s heirs

Owner Policy:

Owner’s title insurance policy establishes owner’s equity. It protects your investment as the owner of the property and ensures coverage against losses or damages caused due to defect in the property title. In other words, owner's title policy protects your equity against most causes of title, except the ones that are excluded in the policy.

Owner’s title policy will stipulate as to what is covered in the policy. It gives you the assurance that your ownership title does not have any defects (free from Defects) and therefore, can be commercially traded i.e. you have the right to sell the property and transfer the title to the buyer.

Owner's title insurance is for the amount of the real estate purchase. With Owners title insurance, payment is a one-time fee at closing and it lasts for as long as you are interested in the property.

Note that lenders title insurance and owner’s title insurance are two separate policies that service two different entities.

• Lender’s title insurance only provides a safety net for lenders for the duration of the loan and covers the amount of the loan balance at any given time.
• The owner’s title insurance provides coverage to the owner of the property against losses incurred due to defects in title.

Prices for lender title and owner title vary from one insurance company to another