What is Title Insurance and Who Pays For It?

By Home Bay

Posted on November 12th, 2014

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.

Real estate title

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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