How is Owner’s Title Insurance Different from Lender’s Title Insurance?

By Marc Shaw

If you have ever purchased real estate in the past, you may remember your lender requiring you to purchase a lender’s title insurance – sometimes called a loan policy – before the loan could go through. You may have thought this policy was meant to protect you, but you would be mistaken. There are some important differences between a lender’s title insurance policy and an owner’s title insurance policy. Read on to find out more about the differences between these two types of policies so you can make the best decisions to protect yourself from title defects.

What is a Lender’s Title Insurance Policy?

As we mentioned, lenders will require you to buy a title insurance policy before they will give you a loan. This policy protects the lender from incurring any financial losses due to title defects that come up in the time between the sale and the time at which the loan is paid off. The policy covers a range of defects, including:

• Tax liens and several other types of liens
• Errors in public records
• Forged or fraudulent documents in the chain of title
• Easements that could affect the use of the property
• Boundary disputes and surveying errors

These and other title defects can cost a lot of money and could even call the ownership of the property into question. The lender’s title insurance policy will cover these costs – but only for the lender. This type of policy also loses value as the mortgage is paid off, and expires when it is paid in full.

Owner’s Title Insurance

Much like a lender’s title insurance policy, an owner’s title policy provides coverage for all the same types of title defects. The main difference is who the policy covers. Remember that lender’s policy you purchased? It doesn’t cover you at all. If you want the same coverage, you will need to buy a separate owner’s title insurance policy. An owner’s policy also does not lose value the way a lender’s policy does. Once you make the one-time premium payment, you will be covered for the entire time you own your property, even if you refinance.

While owner’s title insurance is not required in every state, it is always a smart investment for property owners. And even if you didn’t buy a policy before closing on a property you currently own, you can buy one at any time to protect yourself in the future. It’s never too late to get coverage from a reliable title insurance company!

If you are interested in purchasing a policy, or you have questions about coverage, get in touch with the title insurance experts at World Wide Land Transfer right away. Visit our contact page for a list of regional offices and call us to speak with a title agent. The investment you have made in your property is too important to go without title coverage; call World Wide Land Transfer to get covered today!

World Wide Land Transfer is a service-oriented PA title company with offices in Philadelphia, New York, and Texas. With a record of going above and beyond, we are trusted to close everything from complex commercial transactions to residential refinance and purchase transactions.