What are Homeowner and Lender Title Insurance Policies?
What are
TITLE INSURANCE Owner’s and Lender’s POLICIES?
OWNER'S POLICY
This policy insures the
interest of the homeowner. The owner's title policy protects
the homeowner and his/her
heirs
for as long as they have
an interest in the property. During the time that an owner's policy is
in effect, if a defect in the title arises, the homeowner is fully
covered,
subject to the
exceptions and exclusions of the policy, against loss within the limits
of the
policy. If a claim
covered
by the title policy
is made against the title, the title insurer defends the homeowner and
pays the legal expenses
involved.
The premium
for the owner's title policy is a one-time fee that
covers
claims against the title
to your home up to the face amount of the title
policy.
Remember,
there is only one premium
to pay at the time of the issuance of the owner's title policy, and
there is no further premium or renewal to be paid.
Yet, the
protection lasts as long as the homeowner or his heirs retain an
interest in the property.
LENDER'S POLICY
The loan policy insures
the validity
and priority
of the lien taken against a particular property.
If a mortgage is
to be placed on your new home, the Mortgage Lender will probably
require that you purchase title insurance to protect its investment. The
loan policy does
not protect the homeowner;
it protects only
the Mortgage Lender.
SIMULTANEOUS ISSUE
It is financially
prudent to get your Owner's Title Policy and Lender's Title Policy at
the same time. The reason is that a substantial
discount is given by virtue of the simultaneous
issue.
Because
two policies are being issued "simultaneously:' the second policy is
issued for a minimal flat fee. |
