Homeowners Insurance: An annual payment to the insurer that protects the homeowner against future losses and damages to their home. The policy normally covers interior and exterior damage, loss or damage of personal assets, and injury that arises while on the property.
Mortgage Insurance: A monthly payment to the insurer that protects the lender in the event that the borrower fails to make his/her mortgage payments.
Owner’s Title Insurance: A one-time payment to the insurer that protects the real estate owner and lender from title issues that occurred in the past. The insurer will issue a mandatory lender’s policy and optional (but highly recommended) owner’s policy. The policies protect the owner and lender against past defects or problems with the legal ownership of the property. Such defects include forged documents, lien claims on the property, undisclosed easements, ownership claims made by others, and mistakes from the previous title agency.