Home ownership is a significant milestone and the largest financial investment many people will ever make. To safeguard their rights to that property, title insurance can be an invaluable addition - protecting owners from costly fees if any challenges arise regarding legal ownership of their home.  We posted a blog about title insurance and why it's important last week.  We did have some specific questions about it the information.  Based on that feedback, we felt it would be best to explain some of the differences between an Owner's title insurance standard policy and an enhanced policy below.  

Owner's title insurance is not mandatory but worthwhile in my opinion.  It provides assurance against future claims or disputes regarding one's right of possession over the property purchased. Bearing in mind lender requires you purchase lender's title insurance on their behalf, so the lenders consider title insurance essential.  As a Buyer you should consider two types of policies: Standard and Enhanced Title Insurance options - both providing crucial protection at different levels.  Both are optional and the standard policy is less expensive than an enhanced policy.  Your title company will be able to give you a price quote and the specific coverages for both policies, so that you are able to make an informed decision.  

Standard Policy:

A Standard Owner's title insurance serves as an essential layer of protection for homeowners and lenders. This includes protection against:

  • The inability to transfer ownership
  • Any lien, encumbrance, or defect on the title
  • Removal of existing structures due to an encroachment onto an easement, a building set-back line or even onto an easement on your neighbor’s land
  • The lack of right of access to and from your land

Enhanced Policy:

An Enhanced Owner’s title insurance policy includes all the coverages listed above with the Standard Policy, plus protection against other risks such as:

  • Someone is trying to impose an unjust limitation on your real estate title, rooted in discrimination against race, color, religion, sex, and other protected qualities
  • Your title is taken or lost because of a violation of a restriction or covenant that occurred before you acquired the title
  • One of your neighbors builds a building or structure after the policy date that encroaches onto your land
  • There is a lack of pedestrian or vehicular access to and from your land, based on a legal right.  This would make your property known as being "landlocked" and drastically reduce its value.
  • A taxing authority may impose additional taxes on real estate that has been modified, changed ownership, or had a shift in its purpose prior to the policy date

When it comes to purchasing a property, even the most experienced title professionals may fail to identify some of its risks and potential problems. Fortunately, beyond their thorough search process, they also offer an owner's policy of title insurance that shields you from unforeseen issues such as filing errors or undisclosed heirs - so essentially protecting your ownership rights for life. 

Please feel free to leave a comment or send us a message if you have any specific questions at all.  We will be happy to answer the best we can for you.