That is why a real estate purchaser needs an owner's policy, which can be issued at the same time as the loan policy, usually for a nominal one-time fee. The title insurance company would defend and protect the interest of the lender. The purchaser, however, would have to assume the financial burden of his or her legal defense. The title insurance company pays the lender's loss and is entitled to take an assignment of the borrower's debt. The purchaser loses the down payment, other equity in the property that may have accumulated and the property.
Title insurance is issued after a careful examination of copies of the public records.
But even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search. Title insurance will pay for defending against any lawsuit attacking the title as insured, and will either clear up title problems or pay the insured's losses. For a one-time premium , an owner's title insurance policy remains in effect as long as the insured, or the insured's heirs retain an interest in the property, or have any obligations under a warranty in any conveyance of it. Owner's title insurance, issued simultaniously with a loan policy, is the best title insurance value a property owner can get.