The Two Basic Types of Title Insurance

For nearly 15 years, Marc Rovner, an experienced title insurance attorney from East Rockaway, New York, has served as general counsel and director of business development for BETA Abstract, LLC. As senior staff attorney for the company, Marc Rovner oversees business development in five offices in New Jersey, Florida, and New York.

Title insurance is divided into two basic types: a loan policy and an owner’s policy. The latter type protects the buyer and is often issued in the amount of the real estate purchase price. With this type of title insurance, homeowners’ rights are protected for as long as the owner or his or her heirs maintain an interest in the property. In some cases, this is true even after a property has been sold. Depending on the area, an owner’s policy is bought by either the buyer or seller of a property.

A loan policy protects a property’s mortgage or lender as long as they maintain an interest in a property. Most of the time, this interest continues until a mortgage is paid off. While a loan policy is in place, the validity and enforceability of a mortgage are maintained. When issued, loan policies are in the amount of the loan. A new policy is needed whenever an existing real estate loan is refinanced.