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What Does an Owner’s Title Policy Cover?

When you are buying a new home, you will most likely receive a document, which is known as the deed. The deed will clearly show that the previous owner of the house has transferred their title or legal ownership to you. An owner’s title insurance policy will offer protection to homeowners if someone sues them, arguing that they have a claim against the property or home before the homeowner purchased it.

Most lenders will ask you to buy a lender’s title insurance policy. However, it is crucial to remember that a lender’s title insurance policy will only safeguard the money that the bank has given you for refinancing or a mortgage. This means that a lender’s title insurance policy will not protect any kind of equity you have in the home.

On the other hand, the owner’s title insurance will protect you when someone files a lawsuit with a claim to the deed of the purchased house. This is why all homeowners should consider investing in a title insurance policy.

How Can an Owner’s Title Policy Protect You?

Several homeowners often fail to realize the fact that potential claims against the title of their home may date years back, long before you purchased it. So, if you don’t have an owner’s title insurance policy, you are in big trouble.

Homeowners who are new to the world of title insurance policies often ask what the types of claims are filed against the title. Here are a few examples.

  • Disagreement regarding the property lines
  • Dispute on whether the previous seller had the right to sell the home to you or not
  • Discovery of undisclosed lawsuits or liens against the home or property

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