Owner's
title insurance will cover you if a problem regarding legal ownership
arises that was not discovered during the title search (for example,
if an earlier deed was forged, or that side yard you thought you
were buying belonged to someone else). The title insurance will
pay attorney fees, as well as all other costs in defending the
title. Although title problems are infrequent, they could result
in the loss of the house, so it can be wise to protect yourself.
The bank, or lender, will likely also insist on title insurance
to protect its investment - at your expense.
Mortgage insurance protects the lender (usually
a bank) against the risk of nonpayment by the buyer. The only
reason to buy this insurance is if your lender insists upon it;
there is no benefit to anyone except the lender.
