Owner's Policy
The title insurance policy that protects the buyer's ownership interest rather than the lender's loan.
01
What It Means
An owner's policy insures the buyer's interest in the property, typically up to the purchase price. It covers losses from defects in title existing at the time the policy is issued that are not listed as exceptions.
Coverage generally continues for as long as the insured owns the property, and in many cases extends to heirs who receive it.
02
Why It Matters
A buyer who obtains only a lender's policy — or pays cash and declines coverage entirely — carries the risk of past title defects personally.
Enhanced or extended owner's coverage is available in some situations and may address matters a standard policy excepts.
03
Common Misconceptions
- "If I pay cash, I don't need an owner's policy." A cash buyer has no lender requiring coverage, which means the risk sits entirely with the buyer.
- "The seller's old policy protects me." Policies insure the party named in them, not subsequent owners.
- "Owner's coverage duplicates the lender's policy." The two insure different interests and different amounts.
04
Questions to Ask
- What coverage amount will the owner's policy be issued for?
- Is extended or enhanced coverage available for this property?
- Who customarily pays for the owner's policy in this area?
- What matters are excluded or excepted from coverage?
- How does coverage carry forward if I transfer the property to a trust or entity?
05
Related Reading & Resources
The most successful real estate decisions often involve collaboration between several professionals working toward the same goal. Understanding each person's role helps you ask better questions and make more confident decisions.
06
Other Title Terms
- Title SearchThe research process that traces recorded ownership and identifies documents affecting a property's title.
- Title CommitmentThe document that sets out what the title company found and the terms on which it would insure title.
- Title InsuranceCoverage designed to protect against certain covered defects in title that existed before the policy was issued.
- Lender's PolicyThe policy a lender requires to insure the validity and priority of its lien.
- EscrowThe neutral holding and disbursement of funds and documents according to the parties' written instructions.
- ClosingThe point at which documents are signed, funds are disbursed, and ownership transfers.
Questions About the Closing Process?
Closing on a property involves many moving parts, from title research and escrow to signing documents and recording ownership. I'd be happy to help you understand the process, answer your questions, and connect you with experienced title professionals as you prepare for your transaction.
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