Types of Title Insurance - Owner's vs Lender's Policy

Owner’s vs. Lender’s Title Insurance – Understanding the Differences

Why Title Insurance Is Essential in Real Estate

Buying a home or financing a property comes with hidden risks—from undiscovered liens and unpaid taxes to fraudulent deeds and ownership disputes. Title insurance protects against these risks, ensuring that buyers and lenders have legal and financial security in real estate transactions.

There are two primary types of title insurance:

Owner’s Policy – Protects the homebuyer’s ownership rights.
Lender’s Policy – Protects the mortgage lender’s financial interest.

Let’s break down the key differences and why both are crucial.

Owner’s Title Insurance: Protecting Homebuyers

When purchasing a home, you expect to gain clear and undisputed ownership. However, past claims or legal issues related to the property may still exist—even after a title search. Owner’s title insurance protects homebuyers from these risks.

What Does an Owner’s Policy Cover?

✔ Undisclosed heirs – Someone else claiming ownership due to inheritance.
✔ Unpaid liens or back taxes – Debts from a previous owner that surface after closing.
✔ Clerical errors in public records – Mistakes in deed filings or legal descriptions.
✔ Forgery or fraud – Fake signatures or falsified property records.

Without an owner’s title policy, you could face costly legal battles or even risk losing your home. This policy offers lifetime protection as long as you own the property.

One-Time Payment, Lifetime Coverage
Unlike homeowner’s insurance, title insurance is a one-time purchase that provides long-term security for your investment.

Lender’s Title Insurance: Protecting Mortgage Lenders

Mortgage lenders also require protection when issuing a loan. A lender’s policy safeguards their financial interest by ensuring the property has a clear title and that their lien is legally enforceable.

What Does a Lender’s Policy Cover?

✔ Title defects that impact the lender’s lien position.
✔ Ownership disputes that could affect foreclosure rights.
✔ Unpaid property taxes or existing judgments.
✔ Clerical errors that may invalidate legal documents.

Lender’s Title Insurance Is Required for Most Loans
Unlike an owner’s policy, a lender’s title policy only protects the mortgage company—not the homeowner. The policy remains in effect until the loan is paid off or refinanced.

Secure Your Investment with TechneTitle

Serving Cincinnati, OH, Northern Kentucky & Surrounding Counties

Whether you’re buying a home or financing a property, title insurance ensures a smooth, risk-free transaction. Protect your ownership rights and financial interests by choosing the right coverage.