Final answer:
A mortgagee's title policy protects a lender's interest in the property it is on a mortgage for, and it stays in effect until the mortgage is fully paid off, which can take either 15 or 30 years. Similar to other forms of insurance, it provides specific coverage, such as title issues, to protect the lender's investment.
Step-by-step explanation:
A mortgagee's title policy is a type of insurance that protects the lender's interest in the property until the mortgage is paid off in full. Typically, mortgages have terms of either 15 or 30 years, and during this span, a mortgagee's title policy remains in effect to safeguard the lender from issues like disputes over property ownership, liens that were not disclosed at the time of purchase, and other title defects that could affect the lender's investment. Essentially, this policy pays out when there's damage or a loss related to the property's title, not unlike how auto insurance pays out when a car is damaged, stolen, or causes damage to others, and how health insurance covers medical expenses. Additionally, within a lease agreement, it is specified that neither party shall have liability in the event the residence is lost, destroyed, or possession cannot be delivered on the agreed date for various reasons, indicating different types of coverage and protection measures surrounding property and ownership.