An owner's title insurance policy is typically issued for which amount?

An owner's title insurance policy is typically issued for which amount?

• A. The loan amount
• B. The property's yearly taxes
• C. The total purchase price
• D. A fixed statutory limit

Answer: (C)

Owner's title insurance protects the owner's ownership interest in the property, so the policy amount is tied to the value of what is being bought. That value is typically the total purchase price paid for the property. This coverage ensures that if a title problem arises later—such as an undisclosed lien or a defect in the chain of title—the owner is protected up to the amount paid, not the loan amount or any other figure. The lender’s policy, in contrast, covers the loan amount, and yearly taxes aren’t what title insurance protects. So the standard practice is to issue the owner’s policy for the purchase price.

Owner's title insurance protects the owner's ownership interest in the property, so the policy amount is tied to the value of what is being bought. That value is typically the total purchase price paid for the property. This coverage ensures that if a title problem arises later—such as an undisclosed lien or a defect in the chain of title—the owner is protected up to the amount paid, not the loan amount or any other figure. The lender’s policy, in contrast, covers the loan amount, and yearly taxes aren’t what title insurance protects. So the standard practice is to issue the owner’s policy for the purchase price.