Types of Title Insurance Policies
A native of East Rockaway, New York, Marc Rovner is an experienced attorney and political science graduate from Boston University. He is the general counsel and director of business development at BETA Abstract LLC, in New York, a title insurance company, where he oversees the legal department as well as business development activities. Attorney Marc Rovner also teaches continuing legal education in the areas of real estate, especially title insurance.
Title insurance is a policy used in real estate transactions to protect homebuyers and lenders from risks associated with property title problems. Title risks include forgery, ownership by other persons, lawsuits/judgments against the asset, or wrong signatures on property documents.
However, there are two title insurance classes: a lender’s title insurance/ loan policy and an owner’s title insurance.
Lender’s title insurance protects the lender from property title issues: for instance, if another party makes a legal claim to the asset. It is mostly used in mortgage loan process. This insurance title does not protect equity, but rather safeguards the lender if legal constraints prevent the seller from legally passing title ownership.
An owner’s title insurance policy aims to shield the homebuyer. It is optional, needs to be purchased only once, and its coverage is usually equivalent to the price of the home. The sellers pay for it to safeguard the purchaser’s equity/investment in the property.