Title Insurance Policies Defined, 2 types Owners and Lenders

Lender’s Policy vs. Owner’s Policy:

Many home buyers are confused about the difference between a Lender’s Policy of Title Insurance and an Owner’s Policy of Title Insurance.

A Lender’s Policy will only cover the lender for the amount that is at risk for the lender, generally not the full amount of the purchase price.  

It would be very rare that a lender would not require title insurance for its mortgage loans as its purpose Is to protect the lender.  
~ A Lender’s Policy is purchased by the buyer of the property and is a one time premium. 

The Owner’s Policy is written specifically for the benefit of the owner.  The one time premium covers the property for as long as the owner has an interest in the property.  

The coverage automatically continues for the benefit of the heirs in the event of a death.  Coverage would extend to the trustee of the owner’s trust, upon transferring title to the trust. 

By a search of the public records, this is the first step we take in order to insure your title. We keep track of recorded documents which might affect the title to every parcel of land.  Some things a title search uncovers are any unpaid taxes or mortgages, judgments against previous owners, easements, court actions and many other recorded documents which can affect title to real estate. We find and report such defects in the title to the real estate you wish to buy, so that these matters can be cleared up. It is the first benefit you receive when title insurance is ordered.  

If a claim is made against your title as insured, Chicago Title protects you by: 1) Defending your title, in court if necessary, in the majority of cases at our expense; 2) Bearing the cost of settling the claim if it proves valid, in order to protect your title and keep you in possession of your property.

~ The Owner’s Policy of Title Insurance is traditionally purchased by the Seller of the property for the benefit of the buyer. 
~ The owner’s policy may be subject to possible deductibles & maximum dollar limitations. 

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