What type of insurance protects a lender against claims on the title going back to the time of the sale?

Lender's title insurance is specifically designed to protect lenders from financial loss due to defects in a property's title. This type of insurance covers claims that may arise concerning the title of the property from the time of sale, ensuring that if there are any legal claims or liens that were undiscovered at the time the lender provided a mortgage, the lender would be compensated for their losses.

This insurance is crucial for lenders because it protects their investment in the property. In the event of title disputes or if the property title has issues like unresolved liens or claims against it, the lender can recover their losses up to the coverage amount of the title policy.

In contrast, owner's title insurance protects the buyer from similar issues regarding the title but does not cover the lender. Flood insurance and hazard insurance, while important for protecting property, do not relate to title issues. Flood insurance specifically covers damage from flooding, and hazard insurance covers damage to the property itself due to risks like fire or theft, rather than legal claims against the title.