What is the difference between an owner’s policy and lender’s policy?

There are two policies when a home is purchased with a loan: a lender’s policy, which is required, and an optional owner’s policy. The main difference between the two is that an owner’s policy protects a buyer’s interest in your property and a lender’s policy protects a lender’s interest in your property. A seller typically purchases an owner’s policy to assure the buyer of the property that his or her homeownership rights are protected in the event of an unforeseen claim. On the other hand, a buyer typically purchases the lender’s policy to assure his or her lender that its financial interest in the home is protected.