The Difference Between a Lender and Owner Policy

More than likely, your clients already understand the need for and value of title insurance when purchasing a home. A common question that arises during closing is, why are there two separate policies for the owner and the lender? Most other insurance, like car insurance, only requires one policy for the person who actually owns the car. So why is title insurance so different?

Unlike other insurances, title insurance is purchased one time instead of collecting regular premiums. For the buyer, having an owner’s policy protects you from fraud, errors, and disputes that may arise, including any legal fees that are associated with these matters. It also covers the full purchase price of the home should you lose equity somehow.

A lender’s policy covers the bank’s interest in your property. It will also cover the purchase price of your home. One difference in the two policies is that the lender’s policy decreases as you pay on your loan. Eventually this policy will disappear as the loan is paid off.

Both policies are important to protect both yours and the bank’s investment. This way, both lender and buyer are safe from any unforeseen heirs, fraudulent claims or processing errors. We at Team Title Services help both property owners and lenders get title insurance. If you are an agent, broker, or lender, we are happy to help you establish your own title company to better assist your clients. If you are in the process of purchasing a home or property and in need of title insurance or other personal insurance, we are here to help your closing go smoothly and protect your investment through personal insurance. Contact our office to see how we can best serve you!

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John Dobard – TN
Mason Smith – TN
Josh Nunnally – TN & GA
Web Raulston – GA