What are TITLE INSURANCE Owner’s and Lender’s POLICIES?
This policy insures the interest of the homeowner. The owner's title policy protects the homeowner and his/her heirs for as long as they have an interest in the property. During the time that an owner's policy is in effect, if a defect in the title arises, the homeowner is fully covered, subject to the exceptions and exclusions of the policy, against loss within the limits of the policy. If a claim coveredby the title policy is made against the title, the title insurer defends the homeowner and pays the legal expenses involved. The premium for the owner's title policy is a one-time fee that covers claims against the title to your home up to the face amount of the title policy. Remember, there is only one premium to pay at the time of the issuance of the owner's title policy, and there is no further premium or renewal to be paid. Yet, the protection lasts as long as the homeowner or his heirs retain an interest in the property.
The loan policy insures the validity and priority of the lien taken against a particular property. If a mortgage is to be placed on your new home, the Mortgage Lender will probably require that you purchase title insurance to protect its investment. The loan policy does not protect the homeowner; it protects only the Mortgage Lender.
It is financially prudent to get your Owner's Title Policy and Lender's Title Policy at the same time. The reason is that a substantial discount is given by virtue of the simultaneous issue. Because two policies are being issued "simultaneously:' the second policy is issued for a minimal flat fee. Iin State of Texas, if Lender's Title Policy issued at the same time of Owner's Title Policy, it cost about $100.