When a lender is insured for the Lender’s Policy, they are assured that they’ll be in first-place-position as a lien holder. In other words, they are insured that the mortgage that you, the buyer, are getting will be paid first if the loan is not paid and the mortgage company has to foreclose.
When you pay for an Owner’s Policy, you are getting insurance against anyone coming after closing and stating that they actually own your property. Without an Owner’s Policy you will need to fight that battle legally on your own without the legal aid or protection from the title company.
When you get an Owner’s Policy you are getting insurance and assurance that if anyone comes forward after closing with a claim on the property, the title company’s underwriter will defend you as the rightful owner.
If a lienable item at closing is overlooked, such as back Real Estate taxes bills, overdue sewer or water bills, it is often the new homeowner that is the first to be notified. It is good to know that as someone who has purchased an Owner’s policy that the title company is responsible for making sure these items are paid in full, in order to protect the owner of any further legal actions.
The Owner’s Policy of title insurance is similar to other insurance as it is a purchase for peace of mind. A title search does its best to uncover any and all title defects, but it is good to know that you have insurance against anything that might affect your ownership. With your purchase of Owner’s coverage we will be here and you will be covered as long as you own your home.