An owner's policy insures the buyer's own interest in the property against defects in the ownership history that were already there on the day of closing, for one premium paid once, and it runs for as long as the buyer or their heirs hold an interest.
Every other policy at a closing insures the future: the roof that has not blown off yet, the fire that has not happened. An owner's title policy insures the past. It is bought once, at closing, against the possibility that somebody else turns out to have had a claim on the property before you bought it, and it pays for the fight as well as the loss.
It is also the policy nobody is required to buy, which is why it is worth knowing what it is rather than what it costs. The lender's policy is a condition of the loan and protects the lender alone. The owner's policy is the one covering the buyer's equity, and in Nevada an insurer that issues a loan policy without one has to tell the buyer so in writing.
What it insures, and for how much
Schedule A of the policy names four things: who is insured, the amount of insurance, the estate or interest insured, and the legal description of the land. The amount is normally the purchase price, and unlike a homeowners policy it does not need to be updated as values move, because it is not insuring the building. It is insuring that the interest described in Schedule A is yours and is what the seller said it was.
The insured is the buyer named on the deed, and the policy's definitions carry the coverage on to successors who take by operation of law rather than by purchase: heirs, devisees, a surviving spouse, a trust the owner conveys into for estate planning. Somebody who buys the property from you is not covered by your policy. They buy their own.
A claim is answered in one of three ways: the insurer clears the defect, defends the title in court at its own cost, or pays the loss up to the amount of insurance. The duty to defend is the half people forget.
Where it comes from: the search and the commitment
Before a policy can exist there has to be a search. Nevada makes that explicit at NRS 692A.220: no policy or contract of title insurance may be completed or executed until the insurer has conducted a reasonable search and examination of the title and determined its insurability under its own underwriting practices, and it has to keep the evidence for at least five years.
What the buyer sees during escrow is the commitment, also called the preliminary report of title. NRS 692A.023 defines it as an offer to issue a policy subject to the terms, conditions and exceptions stated in it, and adds the sentence people skip: it does not constitute a representation as to the condition of the title. The commitment is not a clean bill of health. It is a list of what the insurer will and will not stand behind, and Schedule B is the will-not half.
Read Schedule B while the title contingency is still open. Recorded easements, the association's covenants, mineral rights severed a century ago and taxes not yet due are ordinary and will be on nearly every one. Something that is not ordinary, an old lien, an access problem, a lawsuit against the seller, is a thing to raise before the contingency closes rather than after.
One premium, from a filed rate
Title insurers do not quote. They file rate schedules and forms with the state and charge from them. In Nevada NRS 692A.120 requires the filing, deems a schedule approved if the Commissioner does not disapprove it within 30 days, forbids using an unapproved one, and forbids charging for premium, escrow, settlement or closing services except in accordance with the filed schedule.
The premium is a single charge at closing and there is nothing to renew. NRS 692A.041 defines it as the charge for assuming the risk and for abstracting, searching and examining the title to determine insurability, and expressly excludes escrow, settlement and closing charges. So the escrow fee on the settlement statement is a separate line for separate work, whatever the two are called locally.
Where a loan policy is written at the same time, on the same property, the second policy is added at a simultaneous-issue charge rather than a second full premium. That is why both policies almost always come from one company.
Standard against extended coverage
Owner's policies come in more than one form. A standard policy covers what the record shows and excepts the standard Schedule B matters, among them the rights of parties in possession, unrecorded easements and anything an accurate survey would disclose. An extended policy removes several of those exceptions, usually on the strength of a survey and an inspection, and costs more from the same filed schedule.
The expanded residential forms published by ALTA take in more still. Which form is being issued is on the commitment, and it is a fair question to ask escrow before closing rather than after a problem.
The Nevada waiver, if you skip it
NRS 692A.210 covers the case where a buyer finances a purchase and no owner's policy has been ordered. Before loan proceeds are disbursed or the lender's policy issues, the insurer or title agent must tell the owner in writing that a policy is being issued to the lender, that it does not protect the owner, and that the owner may buy protection for themselves. If the buyer still declines, the insurer has to obtain a signed waiver and keep it for at least five years.
The statute even prints the wording, which says the lender's policy affords no protection in the event of a defect or claim of defect in the title to the real estate you are acquiring. Declining is allowed. Declining without being told is not.
Questions people ask
Is an owner's title policy the same as the title search?
No. The search is the work of reading what is recorded against the parcel, and the policy is the promise to cover what the search missed or got wrong. The premium pays for both, which is why most of what an insurer spends goes on searching and curing rather than on claims.
Does an owner's policy transfer to the next buyer?
No. It covers the named insured and those who take by operation of law, such as heirs or a trust the owner conveys into. A purchaser is not in that group, so a buyer needs a policy of their own, though many insurers discount a new policy where a recent prior one can be produced.
What is the amount of an owner's policy?
Normally the purchase price, stated in Schedule A. Some buyers insure for the price plus the cost of improvements they plan to make, which the Nevada waiver notice at NRS 692A.210 refers to directly, and an inflation endorsement is available on residential forms.