What is the difference between an owners policy and a lenders policy of title insurance?
An owner’s policy guarantees your ownership of the property you purchased. It guarantees that your ownership is also free from liens, encumbrances, and defects, except as listed in the policy. It also guarantees that you have access to the land and the legal right to sell the property and convey marketable (saleable) title to a new owner. An owner’s policy insures only the purchaser/owner against a loss that may arise by reason of a defect in their title or ownership of real property. The limit of an owner’s policy will generally be for the market value of the house at the time of purchase. A lender’s policy protects only the lender’s interest in the property. Primarily, it insures the lender that it has a priority lien on the property in case the owner defaults on his/her obligation and the lender needs to foreclose on the property. The limit of the lender’s policy is the amount of the loan and it decreases as the loan is paid down. Finally, the Lender’s Policy expires upon payment in
