Final answer:
An ALTA lenders' policy of title insurance typically omits the standard exceptions to provide enhanced coverage for the lender, which is different from the coverage in a standard loan policy. To reassure a bank, a borrower can provide collateral or show strong financial credentials. An insurance premium is the payment made for this coverage.
Step-by-step explanation:
An ALTA lenders' policy of title insurance differs from a standard loan policy primarily in that it omits the standard exceptions usually found in Schedule B of the title insurance policy. These standard exceptions typically include items that have not been recorded in public records, such as certain easements, encumbrances, discrepancies, conflicts in boundary lines, or any other items that could not be discovered through a reasonable search of public records.
An ALTA lenders' policy enhances coverage for the lender against potential losses associated with these risks. On the other hand, to reassure a bank about a loan when there is imperfect information on the borrower's ability to repay, a borrower can provide collateral, show proof of steady income, offer a cosigner, or have a good credit history. An insurance premium is the amount of money that an individual or business must pay for an insurance policy, which provides coverage over a set period.