Owner’s vs. Lender’s Title Insurance: What’s the Difference?

Most buyers don't realize there are two separate title insurance policies until they're sitting at the closing table looking at a settlement statement. They see a line for title insurance and assume that's it. It's not. There are usually two, and the more valuable one is technically optional, which is exactly why some buyers skip it. Don't be one of those buyers.

The Lender's Policy

If you're financing the purchase, your lender will require a lender's title insurance policy. This protects the lender (not you) against title defects that could affect their ability to enforce the mortgage. The policy amount equals the loan balance and decreases as you pay the loan down.

You pay for this policy at closing. It's not negotiable; you cannot waive it. And it provides exactly zero protection to you as the homeowner. If a title claim wipes out your equity, the lender's policy makes sure the bank gets paid. You're on your own.

The Owner's Policy