What types of insurance are issued on residential properties?
Two types of Policies are typically issued on residential properties: Lender’s/Loan Policy and Owner’s Policy. A Lender’s Policy covers the lender for the life of the loan. If a new loan number is issued and the current mortgage is paid off, then a new Policy is required. The Lender’s Policy is usually based on the dollar amount of your loan and protects the lender’s interests in the property should a problem with the title arise. The policy amount decreases each year and eventually disappears as the loan is paid off. Any time a new loan is obtained and the current loan is paid off, a new Lender’s Policy will be issued. An Owner’s Policy protects your interest in the property for as long as you own the property. It protects you against the acts of previous owners, mortgages, judgments, etc. filed of public record. Owner’s title insurance is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts as long as you or your heirs have
