Which statements are true for an Owner's Title Policy?

Which statements are true for an Owner's Title Policy?

• A. Liability of the insurer increases as owner's equity increases.
• B. The insurer's liability may continue beyond any interest of named insured.
• C. A right is reserved to buy the insured's interests.
• D. Both A and B

Answer: (D)

An Owner’s Title Policy protects the owner’s interest in the property and, importantly, runs with the land to cover anyone who has an interest in the property, such as heirs or future owners. The insurer’s liability is tied to the insured value tied to the owner’s stake in the property. As the owner’s equity in the property increases, the amount at risk in the event of a title defect also grows, so the potential liability under the policy effectively increases with that equity. At the same time, the policy isn’t limited to the current named owner’s life or ownership alone—the protection applies to the land and to anyone who has an interest in it, so the insurer’s liability can continue beyond the named insured’s current interest as ownership changes or as heirs and assigns come into play. A provision that reserves a right to buy the insured’s interests isn’t a standard feature of a typical Owner’s Title Policy.

An Owner’s Title Policy protects the owner’s interest in the property and, importantly, runs with the land to cover anyone who has an interest in the property, such as heirs or future owners. The insurer’s liability is tied to the insured value tied to the owner’s stake in the property. As the owner’s equity in the property increases, the amount at risk in the event of a title defect also grows, so the potential liability under the policy effectively increases with that equity. At the same time, the policy isn’t limited to the current named owner’s life or ownership alone—the protection applies to the land and to anyone who has an interest in it, so the insurer’s liability can continue beyond the named insured’s current interest as ownership changes or as heirs and assigns come into play. A provision that reserves a right to buy the insured’s interests isn’t a standard feature of a typical Owner’s Title Policy.