What is an Owner's Policy?
The Owner's Title Insurance Policy Explained
An Owner's policy or Owner’s Title Insurance protects purchasers of real estate against defects in title. In case of a claim (loss), the title insurance company takes the liability and will reimburse the insured up to the face amount of the policy.
Title insurance policy will cover:
- FINANCIAL LOSS due to covered claims that may be asserted against the title to the real estate, up to the face amount of the title policy
- LEGAL COSTS if the title insurer has to defend the title to real estate against a covered claim
- ALL SUCCESSFUL CLAIMS against the title to the real estate covered by the policy, up to the face amount of the policy.
Some of the past problems that have been covered by title insurance include:
- FALSE IMPERSONATION
- FORGED DEEDS
- DEEDS BY PERSONS OF UNSOUND MIND
- DEEDS MY MINORS
- INVALID DOCUMENTS
- INVALID DEEDS
- DEEDS WITHOUT SPOUSE JOINTLY SELLING
- FRAUD
- LIENS FOR UNPAID ESTATE INHERITANCE AND GIFT TAXES
- UNRECORDED EASEMENTS
- UNDISCLOSED HEIRS OF FORMER OWNER'S
- List of potential title defects
Without title insurance these problems become your problems and could cause significant financial loss.
The amount of insurance for the Owner's Policy is based upon the full consideration (generally the sales price); however, the buyer may choose to obtain a greater amount of insurance by paying the appropriate premium based on the larger insurance amount. Buyers usually ask for more insurance when they expect the value of the real estate to increase dramatically in a short period, especially when the buyer plans on making significant improvements to the real estate, thereby increasing its value.
The lender's policy is purchased by the buyer/borrower and is usually required as a condition of the loan. This is a separate policy that is usually paid for by the borrower but provides no protection for the property purchaser. For the purchaser to obtain title insurance, a separate Owner's Policy must be issued. Call us to get a free quote.
Pennsylvania does not require the purchaser to obtain an Owner’s Title Insurance policy, however, Pennsylvania Insurance laws do require the purchaser to sign a "Waiver of Owner's Title Insurance" form if the purchaser pays for a Lenders policy but waives to obtain an Owner's Policy.
