Lender’s vs. Owner’s Title Insurance

Hello, this is Deirdre Brown your settlement agent serving the District of Columbia, Maryland, and Virginia. Today we’re going to talk about the two types of title insurance.  There are two types of title insurance that can be purchased at settlement.  There is lender’s title insurance and owner’s title insurance.

Lender’s s title insurance is required if you have a loan.  So whether you have a private loan or a loan with a financial institution you will be required to purchase the lender’s title insurance. Lenders title insurance covers the lender up to the loan amount if there is ever a successful claim against the title. A successful claim against the title maybe something like an unrecorded lien or a long-lost heir that wasn’t found in the title search process. There is a one-time fee for the lender’s title insurance and you will need to re-pay that fee only if you refinance the loan.

Owner’s title insurance is optional, but it is highly recommended because it covers the owner’s interest in the property. There are two types of owner’s title insurance – standard and enhanced. Standard owner’s title insurance covers the owner up to the purchase amount if there’s a successful claim against the title. If you have the enhanced policy it may cover you up to the market value on the day of the claim. Please refer to the chart that compares coverage under Standard and Enhanced policies. The Owner’s title insurance premium is a one-time fee and stays in place as long as you have the property.

If you have title-related questions please reach out to us at www.LexiconTitle.com.