When the time comes to close on your next home, you will have the opportunity to put a homeowner's title policy into place. This title insurance may seem redundant to you, since the lender already has title insurance in place.

There seem to be no boundary disputes, the preliminary title report has been issued, and the survey has been verified. At this point, many homebuyers ask the question, "Why do I need title insurance if the lender takes out a policy and a title search has been done?

There are several good reasons.

A lender's title insurance policy protects only the lender's interests, not the homeowner's. The lender's policy is typically for the amount of the mortgage loan, not the full property value, and the policy does not protect a homeowner's equity.

A homeowner's title insurance policy protects a homeowner against any title defects that might crop up later to interfere with your property rights. Most likely, you will never need title insurance, but if you do, you'll be glad to have the title company on your side. When a homeowner is insured, it becomes the title company's responsibility for investigating and negotiating any problems that might arise out of the past.

While coverage varies, a homeowner's title policy typically protects against:

• Ownership claims made by relatives or heirs of a former owner of your home.
• Liens or claims as a result of unpaid taxes, work done by contractors, or bills owed to creditors.
• Mistakes such as an incorrect date or name in your deed or the mortgage.
• Encroachments, such as the discovery that your back fence is actually built on your neighbor's property.
• The invalidity of a previous deed due to a previous owner's mental incompetence or the transfer of deed to property not actually owned.

• Ask about a "reissue" rate on the previous owner's policy.
• Find out about possible savings if your policy is piggybacked onto the lender's policy.
• Shop around for different rates with different companies.