Homeowner’s Policy vs. Owner’s Policy: What’s the Difference?
When you’re guiding clients through closing, one of the most important protections they can secure is Owner’s Title Insurance. But not all policies are the same—and understanding the difference between a Homeowner’s Policy (HOP) and a Standard Owner’s Policy (OP) helps you set clear expectations with buyers.
The Basics
Owner’s Policy (OP):
- The traditional coverage for property owners.
- Protects against title defects, liens, or ownership challenges that existed prior to the closing.
- Focuses on issues discovered after closing but rooted in the property’s past.
Homeowner’s Policy (HOP):
- Expanded coverage, available only to buyers of 1–4 family residences who will occupy the property as their primary residence.
- Includes all the standard coverage of an Owner’s Policy plus additional protection even covering some risks that occur after the policy is issued.
When We Can Issue Each Policy
- HOP:
- For residential properties (1–4 units).
- Buyer must be a natural person (not an LLC, trust, or business entity).
- Buyers must intend to live in the property as their primary residence.
- OP (Standard Owner’s Policy):
- For investment properties, commercial properties, land, or when the buyer is an entity (LLC, trust, etc.).
- Also used when the property is not going to be owner-occupied.
Key Coverage Differences
Owner’s Policy Covers:
- Title defects, liens, or encumbrances that existed prior to closing.
- Forgery, fraud, or errors in public records.
- Lack of legal access to the property.
Homeowner’s Policy Covers (all the above, plus):
- Certain post-closing forgeries and encroachments.
- Building permit violations (existing before purchase).
- Subdivision law violations.
- Encroachments by neighbors (like a fence or driveway crossing boundary lines).
- Coverage for inflation—policy amount automatically increases up to 150% over time.
Why This Matters for Your Clients
- If your buyer is purchasing their primary home, the Homeowner’s Policy gives them broader protection and more peace of mind.
- If they’re purchasing an investment, commercial property, or buying in the name of an entity, the Owner’s Policy is the right fit.
At Results Title, we’ll always review eligibility and recommend the best coverage option to fit your client’s needs. The goal is simple: protecting their ownership and their investment, long after the closing table.
For a more detailed look at the differences between a Homeowner’s Policy vs. an Owner’s Policy click here.
Have questions about which policy applies to your client’s upcoming closing? Reach out to your Results Title closer—we’re here to guide you and your clients every step of the way.
Nancy Cotten
Area Closing Manager
763-694-1053