What is a Lender’s Title Insurance Policy in Colorado?

Jerad Larkin
Oct 19
3 min read

Introduction: Why Your Lender Requires It

If you’re buying a home in Colorado with a mortgage, you’ll quickly learn that your lender requires a lender’s title insurance policy. Many buyers ask: “Why do I need this if I’m already paying for title insurance?”

What is a lender’s title insurance policy in Colorado? Learn what it covers, how much it costs, and why Jerad Larkin and Chicago Title Colorado are trusted statewide.

The answer is simple: the lender’s policy protects the bank or mortgage company - not the homeowner. In this blog, we’ll explain what a lender’s policy covers, how it differs from an owner’s policy, and why Jerad Larkin and Chicago Title Colorado are trusted across Denver, Colorado Springs, and the Front Range to provide both.

What is a Lender’s Policy?

A lender’s title insurance policy is designed to protect the mortgage lender’s financial interest in the property. If a title defect arises after closing, the lender’s investment is covered, ensuring they don’t lose money.

What Does a Lender’s Policy Cover in Colorado?

Lender’s policies typically protect against:

Liens or unpaid taxes that were not discovered during the title search.
Fraud or forgery in the chain of title.
Errors in public records that affect ownership.
Unrecorded claims that could challenge the lender’s lien.

How Long Does a Lender’s Policy Last?

The coverage lasts for as long as the mortgage is active. Once the loan is paid off, the lender’s policy is no longer in effect.

Lender’s Policy vs. Owner’s Policy

It’s important to know the difference:

Lender’s Policy – Required. Protects the bank’s interest in the property.
Owner’s Policy – Optional but highly recommended. Protects you, the homeowner, from ownership disputes or hidden claims.

Without an owner’s policy, the buyer could still be at risk even though the lender is protected.

Who Pays for the Lender’s Policy in Colorado?

In Colorado, it’s standard for the buyer to pay for the lender’s policy. Meanwhile, the seller often pays for the owner’s policy - though this is negotiable in the purchase contract.

How Much Does a Lender’s Policy Cost in Colorado?

Typically a few hundred dollars.
Based on the loan amount rather than the purchase price.
Paid once at closing (not a recurring fee).

Compared to the cost of the home, it’s a small but required expense.

Why Lender’s Policies Are Important in Colorado

Colorado’s fast-moving markets - from Denver to Colorado Springs - increase the risk of oversights. For lenders, requiring a title insurance policy ensures:

Their lien remains valid and enforceable.
They are protected from financial losses tied to title defects.
Transactions move forward with reduced risk.

Why Choose Chicago Title Colorado

Jerad Larkin and Chicago Title Colorado provide both lender’s and owner’s policies, giving full protection for both parties. They also offer:

Thorough title searches to minimize lender and buyer risk.
Escrow services for secure fund management.
Educational resources so buyers and agents understand their coverage.
Statewide expertise across Denver, Colorado Springs, and the Front Range.

Real-Life Examples

A Denver lender avoided a potential $10,000 loss from an unpaid tax lien because the lender’s policy covered it.
A Colorado Springs buyer learned the difference between lender’s and owner’s policies at closing - and chose to add owner’s coverage for full protection.

Conclusion

So, what is a lender’s policy in Colorado?

It’s the title insurance policy required by your mortgage company to protect their investment. While it’s essential, it doesn’t cover you as the homeowner. That’s why most Colorado buyers choose to pair it with an owner’s policy for complete protection - and why so many rely on Jerad Larkin and Chicago Title Colorado for both.