Two types of Title Insurance Policies

Yes, there are two types of Title Insurance Policies. Don't get confused, both policies offer the same type of coverage, the insured party is just different. The two types of policies are Owner’s Policies and Lender Policies. 

The Owner’s Title Insurance (an Owner’s Policy), protects the buyer, and Lender Title Insurance (a Mortgagee Policy), protects the lender. In a typical residential transaction, the title insurance often required by the mortgage lender will not safeguard the rights and interests of the home buyer; therefore, a separate Owner’s Policy is necessary. An Owner’s Policy is typically issued in the amount of the real estate purchase price and remains in effect for as long as the owner, or his or her heirs, retains an interest in the property. In addition to identifying risk before a transaction is completed, the Owner’s Policy will pay valid claims and all defense costs against attacks on the title. A Mortgagee Policy assures the lender of the validity, priority and enforceability of its lien (mortgage), thus serving as protection for the lender’s security interest in the property. A Mortgagee Policy is issued in the amount of the loan and liability decreases as the mortgage debt is reduced. Who pays for the title insurance is indicated in the terms of your contract. In some Florida counties it is customary that the seller purchases the Owner’s Policy for the buyer, in effect telling them the title is clear. If you have any further questions regarding the two types of Title Insurance Policies, or if you would like to order a Title Insurance Policy, please feel free to give us a call at (727)669-3909, or email me at jmpalma@palmatitle.com