Learning Center
Owner's Policy
vs Lender's Policy
There are two types of title insurance, and they protect two different parties. A lender’s policy protects your mortgage lender. An owner’s policy protects you. Here’s how they differ and why it’s worth having both.
Lender’s Policy
A lender’s policy protects the bank or mortgage company that finances your purchase. If a title problem threatens the lender’s interest in the property, this policy covers their loss.
- Who it protects: Your lender only
- Coverage amount: Up to the amount of the loan
- How long it lasts: Until the loan is paid off or refinanced
- Is it required? Yes, most lenders require it when you take out a mortgage
A lender’s policy does not protect your equity or your down payment. If a covered title problem arises, the lender’s investment is protected, but yours is not.
Owner’s Policy
An owner’s policy protects you, the buyer. It covers your financial stake in the property if a hidden title problem surfaces after closing.
- Who it protects: You, and your heirs
- Coverage amount: Typically the purchase price of the home
- How long it lasts: As long as you or your heirs own the property
- Is it required? No, it’s optional, but strongly recommended
An owner’s policy is a one-time cost paid at closing, with no ongoing premiums.
Why Have Both?
If you’re financing your home, you’ll almost always need a lender’s policy. But without an owner’s policy, you’re left unprotected. Your down payment, your equity, and your ownership could all be at risk if a problem from the property’s past comes to light.
Buying with cash? A lender’s policy isn’t needed, but an owner’s policy is still the only way to protect your investment.
Have Questions?
Our team at Access Title is happy to explain your options and help you choose the right coverage for your purchase.