Escrow & Title
What is a 'homeowner's title insurance policy' versus a 'lender's title insurance policy'?
AA. They are identical policies with different names
BB. The owner's policy protects the owner's equity; the lender's policy protects the lender's loan amount—both are typically purchased at closing✓ Correct
CC. The lender's policy covers both the lender and the owner
DD. Only one policy can be purchased; buyers must choose between protecting themselves or the lender
Explanation
An owner's (homeowner's) title insurance policy protects the buyer's equity interest in the property. A lender's policy protects the lender's investment (loan amount). In Hawaii, buyers typically purchase both at closing, with the lender requiring the lender's policy as a condition of the loan.
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