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2 Types of Title Insurance

What are the two types of title insurance?Lender Insurance vs. Owner Insurance:

The Quick Insight


There is often some confusion related to understanding the differences between lender insurance & owner’s insurance. While your lender, realtor, and title insurance company will ensure you are properly covered and everything is filled out appropriately, people often wonder what situations they are covered for and what they may need to double check before signing.


Lender’s insurance protects exactly what its’ name would imply: the lender. Your bank is protected from any future title defects in the case one should arise and they are guaranteed to have a valid first lien against the property. Having the guaranteed first lien is important for a lender because they will want to recover the debt owed to them first before any additional debts or leans are paid off. This example comes into play if a contractor also puts a lean on your house for unpaid work performed; if this lien is worth $30,000 dollars, they will simply have to wait until the full balance of the mortgage is paid off first.


Owner’s title insurance protects the buyer from any issues that may present itself after the transaction closes. The most common situation is when human error misses a signature on the closing documents. In more rare cases, the seller may have forged documents claiming who they are or their right to sell the property.


Owner’s insurance does not cover title defects you knew about, building / zone violations, or any limitations on how the property is to be used. Before closing, your attorney will go over these exceptions with you to make sure there isn’t anything potentially alarming about the property you should know about. 


Table of Contents


What is Title Insurance & Why Do I Need it?

What Does it Mean if My Property Has a Lien Against it?

The 2 Types of Title Insurance: Lender vs. Owner

What Exactly Does Title Insurance Cover?

How Much Does Title Insurance Cost?

How is Title Insurance Different From Other Types of Insurance?

Title Insurance FAQ's

What to Expect at Closing


Brought to you by: 

Patrick J. O'Rourke - Attorney at Law

(309) 585-0714

The Best Real Estate Attorney in Bloomington-Normal, Champaign-Urbana, Peoria, Springfield, and Central Illinois


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