There are typically two types of Title Insurance: an Owner's Policy and a Lender's Policy. This post will explain what each policy is for, who and what it covers and who pays for it.
Owner's Policy:The Owner’s Policy insures the homeowner against defects in the title that were not found during the title search. It is a one-time fee paid at closing and covers the owner or his heirs as long as they have an interest in the property.
Hidden title problems that may later arise include:
- Undisclosed heirs
- Errors or omissions in the deed
- Mistakes in examining the records
This policy may be paid by either the buyer or seller, depending on what is traditionally done in that location.
Lender's Policy:The Lender’s Policy (or "Loan Policy") protects the lender’s interests in the property should a problem with the title be uncovered. The Lender's Policy is typically paid for by the buyer.
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