Lender’s require a lender title policy. This lender policy does not protect you. It insures the Lender will have the first lien by its mortgage. The loan policy protects the lender against loss due to unknown title defects and liens that take priority over the first mortgage. This policy only protects the lender’s interest. It does not protect you. That is why you need an owner’s policy that can be issued at the same time as the loan policy for a one-time fee.

What if some matter arises affecting the past ownership of the property? If you do not have an owner’s title policy, the title insurance company would only defend and protect the interest of the lender. You would have to assume the financial burden of your own legal defense. If your defense is not successful, the result could be a total loss of your property.

How can there be a title defect if the title has been searched and a loan policy issued? Title insurance is issued after a careful examination of copies of the public records. But even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search.

What protection does title insurance provide against defects and hidden risks? If you have an owner’s title policy, the title insurance company will pay for defending against any valid claim against your title. It will either clear up the title problem or pay your loss. For a one-time premium, an owner’s title insurance policy remains in effect as long as you, or your heirs, retain an interest in the property, or have any obligation under a warranty deed. By combining expertise in risk elimination at the time of issuing a policy, and protection against hidden matters as long as the policy remains in effect, your title insurer protects your investment.