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What is Title Insurance and Who Pays For It?

By HomeBay

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.

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  • 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:
    • Forgery
    • 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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