What does a lender's extended coverage title policy protect?

An extended coverage title policy primarily protects the lender's rights in the property. This type of policy goes beyond a standard title insurance policy by offering additional protections against potential risks or claims that may not be covered under a regular policy.

For example, it can protect the lender from certain issues such as zoning problems, issues with access to the property, and some unrecorded liens. This added protection is crucial for lenders, as they want to ensure that their financial interest in the property is secure before funding a loan. In the event of a claim against the title, the extended coverage title policy would help safeguard the lender’s investment, providing a layer of security that is important in real estate transactions.

The other choices pertain to different aspects of real estate and insurance that do not relate to the lender's security concerns. The buyer's rights relate to ownership after a purchase, builder’s warranty focuses on construction-related issues, and homeowner’s insurance covers risks for the homeowner rather than the lender's financial interests.