What is Title Insurance

Title insurance for property owners, called an Owner’s Policy, is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and is valid for as long as the owner or his heirs have an interest in the property. Only an Owner’s Policy fully protects the buyer should a covered title problem arise with the title that was not found during the title search. Possible hidden title problems can include:

  • Errors or omissions in deeds
  • Mistakes in examining records
  • Forgery
  • Undisclosed heirs

Title insurance for mortgage lenders title insurance is called a Loan Policy. Most lenders require a Loan Policy when they issue a mortgage loan. The Loan Policy is usually based on the dollar amount of the loan and it protects the lender’s interests in the property should a problem with the title arise. It does not protect the buyer. The policy amount decreases each year and eventually disappears as the loan is paid off.

Why Every Homeowner Needs an Enhanced Owner’s Policy

There are two types of Title Insurance Coverage

  1. Standard ALTA Owner’s Policy
  2. Enhanced Owner’s Policy

Standard ALTA Owner’s Policy

The Standard Owner’s policy protects you from defects and liens in the history of your title through the date and time your deed is recorded in the public records (see comparison below)

Enhanced Owner’s Policy

Enhanced  Owner’s Policy provides expanded title coverage for owners of one-to-four family residences, including condominiums.

  • Post-policy Forgery
  • Post-policy Encroachments
  • Post-policy Adverse Possession
  • Coverage extended to homeowner when someone claims to have the insured’s title arising out of someone else’s continued use and occupancy
  • Post-Policy Easement by Prescription
  • Coverage if another claims right to use a part of the insured’s land as an easement because of continuous use over time
  • Building Permit and Zoning Violation
  • Coverage for losses up to $25,000, after a small deductible, for building permit violations and forced remediation of zoning violations, and up to the full policy amount for forced removal of structures due to zoning violations
  • Expanded Access
  • Expanded to include both vehicular and pedestrian access to and from land, based upon legal right
  • Subdivision Violation
  • Homeowners are covered up to $10,000, after a small deductible, for protection against subdivision violations prior to purchase
  • Restrictive Covenant Violations
  • Coverage provided for violations of restrictive covenants, occurring before homeowner acquired land if the homeowner is forced to correct or remove the violation or if the homeowner’s title is lost or taken because of the violation
  • Structural Damage for Mineral Abstraction or Easement Use
  • Encroachment of Boundary Walls and Fences
  • Protection of up to $5,000, after a small deductible, for encroachments onto a neighbor’s land, onto an easement, or over a building set-back line
  • Encroachment of Improvements onto Easements and Set-backs