When you buy a home, it is common for your lender to require you to purchase lender's title insurance. Many buyers assume that this insurance is designed to protect them down the road in case someone shows up and claims to own what they have purchased (for example, heirs of the seller might surface and claim that they owned an interest in the property sold to you). But, lender's title insurance protects only the lender in this case (i.e., in the event the bank forecloses and the lender takes possession of your home).
Want similar protection from the unknown? Opt for owner's title insurance, which covers your losses in the event a long-lost relative shows up.
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