What type of policy covers unknown issues in a property’s title?

An owner’s title insurance policy is specifically designed to protect the property owner against losses that may arise from unknown issues related to the property’s title. This includes hidden defects that may not have been discovered during the due diligence process, such as errors in public records, unknown liens, or claims by undisclosed heirs. By purchasing an owner’s title insurance policy, the homeowner obtains coverage that lasts as long as they or their heirs hold an interest in the property.

The other options do not provide the same level of protection for title issues. A mortgage title insurance policy specifically protects the lender's interest in the property, ensuring that the lien against the property is valid and enforceable, but does not cover the owner's interests against unseen title defects. A homeowner’s insurance policy generally covers damages to the home and personal property against specific risks like fire, theft, or liability, but does not address title issues. An investment property insurance policy functions similarly to homeowner’s insurance but is tailored for properties purchased for investment purposes and still does not extend to title issues. Thus, the owner’s title insurance policy is the comprehensive safeguard against unknown title problems.