FSBO, Title Ins Optional For Owner?

[Mike C.]

Buying SFR FSBO. Below is text from a form from the title company (large, national) that states I will pay title insurance for lender coverage, but title insurance for owner is an option, and not necessarily the same as the lender insurance. I must sign this, and also indicate if I want title insurance, which I understand from other posts here that I absolutely should buy.

Regarding the optional owner title insurance, my questions are:

Per item 4 below, why is the coverage offered to the owner possibly not the same as that provided to the lender? Do owners not have the same need to protect against the same risks as lenders?

They don't seem to be offering me options, just buy what they offer, or not. Is this controlled by law, that is, could I end up paying for coverage that may not cover, or is it just different because of the difference in positions of lender and owner?

Any comments will be appreciated.

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NOTICE TO PURCHASER OF RIGHT TO OBTAIN

OWNER'S TITLE INSURANCE POLICY

In connection with the settlement of a real estate transaction involving a Purchase Money Mortgage or Deed of Trust on property located in MD, NOTICE is hereby given in compliance with Md. Code Ann. Ins. § 22-102 (a) (2).

1. That a Mortgage Title Insurance policy will be issued by Chicago Title Insurance Company insuring the Lender in the amount as set forth on the Purchase Money Mortgage or Deed of Trust in a premium amount as set forth on your Settlement Statement.

2. That this policy will provide protection only to the Lender and does not protect you as property owner.

3. That your name has been placed on a Commitment for Title Insurance furnished to you and you are hereby given the right to obtain a SIMULTANEOUS Owner's Title Insurance Policy for an additional premium, if you request it at this time.

4. That the Owner's title Insurance policy will be subject only to the contingencies and conditions contained in the Commitment and the Conditions and Stipulations that will appear in the Owner's Policy.

5. You have a right to review a sample form of the policy in which said contingencies, Conditions and Stipulations will be inserted.

6. The Owner's Policy will be effective upon payment of the premium, subject to the satisfaction of the requirements and contingencies as set forth in the commitment.

ACKNOWLEDGEMENT OF NOTICE, etc, etc...