Owner's vs. lender's policy
Two kinds of title insurance protect two different people. Here's how they compare.
Title insurance protects against problems with ownership that already existed before you bought the property but were not found in the public record. Unlike other insurance, you pay for it once, at closing.
There are two policies, and they protect different people.
| Owner's policy | Lender's policy | |
|---|---|---|
| Who it protects | You, the buyer and owner | Your mortgage lender |
| Coverage amount | Usually the purchase price | Usually the loan amount |
| How long it lasts | As long as you or your heirs own the property | Until the loan is paid off |
| Premium | Paid once, at closing | Paid once, at closing |
| Who usually pays | The seller | The buyer (borrower) |
| Required? | Optional, but strongly recommended | Required by most lenders |
This is the usual split in Michigan sales. Your purchase agreement can divide the costs differently.
What title insurance can cover
- Forged or fraudulent documents in the chain of title
- Unknown heirs or missing signatures from a past owner
- Errors in public records or in a legal description
- Unreleased mortgages, liens or judgments from past owners
- Mistakes in how a deed was signed, notarized or recorded
Every policy lists its own coverage, exceptions and exclusions. Your commitment shows exactly what will and won't be covered. Abacus Title policies are issued as agent for First American Title Insurance Company.
Why owners should have their own policy
A lender's policy protects only the lender's loan. If a covered title problem appears, the owner's policy is what defends your ownership and your equity, for as long as you own the home.
Ready to open a file?
Order online, email orders@abtitlemi.com, or send our order form to any office.