Why the lender's policy isn't enough
The lender's policy only protects the lender, and only for the loan balance. If a title problem costs you the property, the lender is paid back and you're left with nothing for your down payment or the value you've built.
Real problems an owner's policy covers
These are rare, but when they happen they're expensive, and an owner's policy pays for the lawyers as well as the loss.
- A previous owner's signature turns out to be forged
- An heir who was left out of an estate claims part of the house
- A contractor's lien from the previous owner's remodel surfaces
- A former spouse never signed away their interest
- A clerical error in the records puts your lot in someone else's name
Standard and extended coverage
A standard policy covers what's in the public record. Extended or enhanced coverage can add protection for some matters a survey or inspection would reveal, and for certain risks that arise after closing. Whether it's available depends on the property and the underwriter.
When you buy it
Only at closing. If you don't buy an owner's policy when you purchase, you can't add one later for the same purchase. That's the main reason not to skip it.
Common questions
How much is owner's title insurance on a $300,000 house in Kansas?
It's a one-time premium set by the underwriter's rates for that price. Request a title quote and you'll get the exact figure for your price and loan.
Who pays for the owner's policy?
Whoever the contract says. In many Kansas City area contracts the seller pays for it, but it's negotiable.
What happens if I don't get title insurance?
You'd pay to defend any claim against your ownership yourself, and you'd bear the loss if the claim succeeds.
Does an owner's policy transfer when I sell?
No. The new buyer gets their own policy. Your policy keeps protecting you for warranties you made as the seller.