If the Lender is paying for Title Insurance, why do I need a title policy?

The loan title policy taken out by the lender only protects the lender’s interest. It does not cover claims made by the purchaser/borrower. That is why the purchaser/borrower typically obtains an owner’s title policy, which protects his or her ownership interest from loss due to title defects or other related issues. The owner’s title policy can be, and often is, issued at the same time as the lender’s policy.