Owner/Loan Policies

In Tennessee, the two most common types of title policies are a “loan policy of title insurance,” and an “owner policy of title insurance,”.A loan policy is used to protect the lender while an owner policy is used to protect property buyers.

Most lenders won’t loan you money to buy a house or other property unless you buy a loan policy. This policy will pay the balance of your mortgage if a claim against your property voids your title. A loan policy covers up to the amount of the principle on your loan. Loan policies remain in effect for the life of the loan.

An owner policy only covers you up to the value of the property at the time you purchased the policy. It does not cover any increase in value, unless you purchase a special “increased value endorsement.” An owner policy remains in effect as long as you or your heirs own the property or are liable for any title warranties made when you sell the property. You should keep your owner policy, even if you transfer your title or sell the property. Title insurance generally doesn't protect against boundary disputes with neighbors. This kind of coverage is available for purchase for an additional premium.