Which type of policy covers defects, liens, encumbrances, and claims against a property?

An owner's policy is designed to protect the property owner from issues that could affect their ownership rights. This type of policy covers defects, liens, encumbrances, and claims against the property that may arise after the purchase. For instance, if there are past due taxes, incorrect property descriptions, or disputes regarding property lines that surface after the owner has taken possession, an owner's policy can provide financial protection against these claims.

In contrast, a loan policy primarily protects lenders in the event of defects or claims on the property that could threaten their financial interest in the mortgage. A leasehold policy is targeted specifically to tenants who hold a lease on a property, insuring their interests in that lease against claims or defects. An endorsement policy offers additional coverage to a standard title insurance policy but does not typically stand alone in providing comprehensive protection against the range of issues covered by an owner's policy.

Therefore, the owner’s policy is the most appropriate choice when it comes to covering various risks associated with ownership of real property.