Title insurance protects against covered ownership, lien, recording, fraud, and other title defects that existed before a real-estate transaction. A lender’s title policy protects the mortgage lender, while an owner’s title policy protects the buyer’s insured ownership interest.
Title insurance does not guarantee that no title problem exists. The title company researches public records, issues a title commitment identifying the proposed coverage and exceptions, completes closing requirements, and issues the policy after closing. Coverage is controlled by the actual policy.
| Policy | Who it protects | General coverage amount and duration |
|---|---|---|
| Lender’s title policy | The mortgage lender and its successors or assigns under the policy | Generally tied to the insured loan amount and declines or ends as the insured debt is paid, subject to policy terms |
| Owner’s title policy | The named property owner and eligible successors under the policy | Generally issued around the purchase price and can continue while the insured retains an interest, subject to terms and endorsements |
A lender’s policy does not protect the homeowner’s equity merely because the borrower paid the premium. Owner’s coverage is a separate policy decision.
The title commitment is the title insurer’s offer to issue specified policies after listed requirements are satisfied. Its exact format varies, but commonly includes:
The Colorado Real Estate Commission’s 2026 residential purchase contract warns that title documents affect title, ownership, and use and should be reviewed carefully.
Not every issue is a defect. An easement may be normal and necessary. The question is how the matter affects the buyer’s intended use, marketability, lender requirements, and insurance coverage.
An exception identifies a matter the policy does not insure against. Examples can include a recorded easement, restrictive covenant, mineral reservation, taxes not yet due, survey matter, or rights of parties in possession. An exclusion is a broader category of risk excluded by the policy form, such as governmental police power or defects created by the insured.
A buyer can ask the title company, attorney, and real estate broker whether an item:
Only an attorney should provide legal advice about the effect of a title document.
Subject to the policy, covered risks may include certain losses involving:
Coverage can include defense costs for a covered claim, but the insurer controls the response under the policy. A claim is not automatically paid merely because a dispute occurs.
Home inspection, survey, appraisal, homeowners insurance, and title insurance address different risks.
The Colorado purchase contract can allocate who selects the title company and who pays for the owner’s policy and other title or closing services. Local custom is not a substitute for the written contract.
Federal law generally prohibits a seller from requiring a buyer, as a condition of sale, to purchase owner’s title insurance from a particular title company in a covered transaction. The buyer may also be able to shop for certain title and settlement services identified on the Loan Estimate.
Compare:
An endorsement changes or adds policy coverage. The lender may require endorsements for matters such as planned-unit developments, condominiums, adjustable-rate loans, environmental liens, location, access, survey, or other loan and property features. An owner may consider enhanced or specific coverage based on the property and title review.
Ask which endorsements are required, optional, included, or charged separately, and read what each endorsement actually covers.
A refinance generally requires a new lender’s title policy because the new mortgage creates a new insured lien. The homeowner’s existing owner’s policy usually remains associated with the ownership interest, subject to its terms. A reissue or refinance rate may reduce the new lender-policy premium when eligibility and documentation requirements are met.
Construction can create mechanic’s-lien risk involving contractors, subcontractors, suppliers, and laborers. The title company and lender may require affidavits, lien waivers, indemnities, inspections, disbursement controls, or extended coverage. Final payment to a contractor does not necessarily prove every downstream party was paid.
Criminals can imitate a title company, lender, real estate agent, or attorney and send false wiring instructions. Before sending money:
A mortgage lender generally requires a lender’s title policy. An owner’s policy is a separate consumer decision, though the purchase contract may provide for it.
A search reduces risk but cannot reveal every forgery, unknown heir, recording error, identity issue, or off-record claim. The policy provides contractual coverage for stated risks subject to its terms.
It is generally a one-time premium paid in connection with closing rather than a monthly premium.
Not automatically. Standard exceptions may exclude survey, encroachment, or boundary matters. Ask what survey evidence and endorsements would be required for additional coverage.
Possibly, but the contract, deadlines, lender closing process, completed work, fees, and seller obligations matter. Make the change early and in writing through the appropriate parties.
Review the policy’s notice instructions and contact the insurer promptly. Provide the policy, claim documents, correspondence, and relevant closing records. Consider legal counsel.
Resolve ownership, lien, access, HOA, trust, insurance, and closing questions before they become a financing or closing deadline.
Reviewed September 2, 2026 by Michael Shotnik, Broker | Owner, Milestone Home Mortgage, LLC, NMLS 218281. General educational information only and not legal or title advice. Coverage depends on the commitment, policy, endorsements, exceptions, exclusions, contract, recorded documents, and individual facts. Consult the title insurer and a qualified Colorado real-estate attorney.
Updated August 31, 2026
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