Purchasing a home is one of the largest financial investments one will make in their lifetime. Title insurance policies help protect against loss when a buyer's ownership rights are challenged. There are two types of residential title insurance, an Owner's Title Policy and a Lender's Title Policy.
The Lender's Title Policy protects the mortgage lender's interest in the property against unforeseen title problems up to the amount of the mortgage. It DOES NOT protect the homeowner.
The Owner's Title Policy insures the homeowner (and their heirs) interest in the property against title defects for as long as the insured owns the property up to the face amount of the policy. If any claim is made against the title to the property, the underwriting title company defends the homeowner and pays all legal expenses involved.
While a mortgage lender's policy is usually required by the lender, an owner's policy is not required in the state of Kentucky. For a one-time payment at closing, the homeowner can purchase an Owner's Title Policy. There are no other fees or premiums required, and the homeowner is protected until the property is sold.
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