Question: Are there different types of title insurance?

Answer: There are two basic types of title insurance: Lender’s title insurance, also called a Loan Policy, and Owner’s title insurance. Most lenders require a Loan Policy when they issue you a loan.  The Loan Policy is based on the dollar amount of your loan.  It protects the lender’s interests in the property should a problem with the title arise.  The policy amount decreases each year and eventually disappears as the loan is paid off.

Owner’s title insurance is usually issued in the amount of the real estate purchase amount.  It is purchased for a one-time fee at closing and lasts as long as you have and interest in the property.  This may even be after the insured has sold the property.  Only Owner’s title insurance fully protects the buyers should a problem arise with the title that was not uncovered during the title search.  Owner’s title insurance also pays for any legal fees involved in defending a claim to your title.