Do You Need Owner’s Title Insurance?

Hello, this is Deirdre Brown your settlement agent serving the District of Columbia, Maryland, and Virginia. Today I will answer the question of why do I need owner’s title insurance if I have a lender’s title insurance policy. 

The simple answer is that the lender’s title insurance policy does not protect you the owner. The longer answer is that the lender’s title insurance policy covers the lender up to the loan amount if there is ever a successful claim against the title.  So as the years go on and you make payments that diminish the claim amount because the loan gets smaller and smaller. Eventually, it may go away if you stay in your property long enough.

Owner’s title insurance protects you the owner if there is ever a successful claim against title either up to the purchase price or up to the market value on the day of the claim depending on what type of policy you purchased at settlement. The Owner’s policy premium is paid at settlement and it is a one-time fee.  The owner’s title insurance policy protects you for as long as you own the property whether you still have a loan on the property or not.  The decision is yours to make however I will tell you that a large percentage of my clients once I explain to them the benefits of having owner’s title insurance, which basically is that they are making sure that their interest in the property is protected,  decide to move forward with the owner’s title insurance policy.

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