A title insurance policy will protect the insured against losses arising from the defects in title such as the following items:
1) Forged documents
2) Undisclosed heirs to the property
3) Mistaken legal interpretations of wills
4) Misfiled documents
5) Confusion in similarity of names
6) Incorrect marital status
7) Mental incompetence
8) Title Insurance for owners
9) Title Insurance for lender
Some areas of the country require both a lender & owner title policy to be purchased. Local custom and practice usually dictate which party buys the appropriate title insurance. Seller may pay for the buyer's policy and the purchaser/buyer may pay for the lender's policy. The lender policy covers the same items as the owner's policy and ensures the lender is limited to only the mortgage balance on the dated of the claim. This amount reduces with every mortgage payment. Because of the decreasing liability, the lender policy usually costs less than the owner policy.
