Owning a home continues to be one of the most important parts of the American Dream.

But having the deed to a piece of land does NOT necessarily mean the property is yours free and clear. Other people may have certain prior rights or claims that you deed will not erase. Such rights can go back all the way to the earliest owners of your new property.

You want to be sure you will remain the true owner, and that there will be no claims or liens against your new home-other than the mortgage you agreed to pay.

A "Loan Policy" is title insurance that protects the Lender, NOT the Owner.

When you close on your mortgage loan, title insurance may be included in the amount you pay. Known as a Loan Policy, this type of title insurance covers the mortgage company for up to the full value of the policy if you are unable to pay your mortgage bills and the company suffers a loss.

WARNING: The loan policy does not protect YOU!

You can protect your own interest in the property you just bought with a policy called "owner's title insurance."

Protection for you: "Owner's Title Insurance"

An owner's title insurance policy describes the property and defines your ownership "limitations", if any. The limitations could be in the form of existing liens or items disclosed you before you agreed to the purchase. In other words, limitations you have accepted in buying the house/property.

Owner's title insurance protects you against what you do not know. It helps take the risk out of buying property whose legal history is long and may not be completely known to you. The so-called "hidden risks" covered by such a policy are not common, but they do exist. If you property's ownership history carries such risks, you could lose the property and the money you pay for it!

The mortgage company has a loan policy to protect its interest in the money it lent you. To protect your own interest in your new property, consider owner's title insurance.

What Owner's Title Insurance Covers

It is likely there are no hidden risks connected to your new property. However, such risks do exist, often as a result of errors made during past title transfers.

Many different people may have owned the land and buildings over the years and there was a change for error each time the title was transferred. If an error occurred but is not discovered until you buy the property, you may face a hidden risk (see examples). Your ownership of the property could come into question.

Owner's title insurance protects you from such errors. Title insurance also provides the coverages shown below.