Home title insurance is a type of insurance that protects homeowners from financial losses due to defects in the title to their property. There are two main types of home title insurance: owner’s title insurance and lender’s title insurance.
- Owner’s Title Insurance: Owner’s title insurance, also known as an owner’s policy, protects the homeowner from financial losses resulting from defects in the title to the property. This includes issues such as outstanding liens or judgments, title fraud, and errors in public records. The policy typically covers the full value of the property, and the coverage lasts as long as the homeowner or their heirs own the property.
- Lender’s Title Insurance: Lender’s title insurance, also known as a lender’s policy, protects the lender in the event that there are defects in the title to the property. This type of insurance is required by most mortgage lenders as a condition of the loan. The policy typically only covers the amount of the loan, and the coverage ends when the loan is paid off.
- Simultaneous Issue Policy: Simultaneous Issue Policy is a combination of both owner’s title insurance and lender’s title insurance, which can be issued at the same time and for the same premium. This type of policy is usually issued to those who are buying and financing a property at the same time.
- Extended Coverage Policy: An extended coverage policy is a type of owner’s title insurance that provides additional protection beyond the standard coverage. This can include protection against zoning or building code violations, protection against loss due to eminent domain, and coverage for certain types of title fraud.
- ALTA Policy: ALTA Policy is a type of owner’s title insurance that is issued by the American Land Title Association. This type of policy provides more comprehensive coverage than a standard owner’s policy, and may include protection against zoning or building code violations, protection against loss due to eminent domain, and coverage for certain types of title fraud.
It’s important to note that the availability and cost of title insurance can vary depending on the state and the type of property, and that it’s important to do research and compare policies from different providers before purchasing title insurance. It’s also worth noting that the title insurance premium is typically paid only once, at the time of purchase, and the coverage lasts as long as you or your heirs own the property.
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