If my lender requires that I purchase Lender’s title coverage, then why do I need an Owner’s title insurance policy?

Purchasers often ask why they need an Owner’s title insurance policy when the Lender’s policy should be enough. The Lender’s Policy only protects the Lender, and only for the life of the loan, consequently the policy expires when the loan is paid off. Conversely, the Owner’s policy protects the Purchaser’s interest in the property he receives, and that coverage continues for his lifetime. This is important because liability for title defects can survive through and even beyond the period of the Purchaser’s ownership. Therefore, for a one-time premium paid at the time of settlement, the Purchaser is protected against prior title defects, or claims made against his title, even after he sells the property or pays off the loan. We strongly recommend that Purchasers obtain their own title insurance policy to protect themselves as Lenders do.

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