Do I need the Enhanced Title Insurance Policy?
Home Buyer Quick Facts by ALT Title
As with all insurance products, you need to assess your own personal risk tolerance to determine if the extra coverage is worth the extra cost.
An Enhanced Homeowner’s Title Insurance Policy offers additional coverage, which may make sense for some very specific - and somewhat rare - situations.
Here are a few examples.
For older properties that have undergone extensive renovations or multiple additions over the years, there may be some benefit offered under the Enhanced policy should your local zoning officer require corrective measures due to work performed without proper permits or violations of the building code at the time the work was performed.
There may be coverage if it’s determined after closing that there is no legal access to your property, leaving it landlocked. A property without any direct access to a public road is not common and would most likely occur in an extremely rural area.
Loss of Property
There’s also an escalation clause that could pay you up to 150% of the property's policy value (vs 100% with the standard policy) if you were to lose the property to a previous owner or heir who successfully proved to be the rightful owner of the property, or a creditor with a substantial lien.
There also may be coverage should a fence or other structure on your property be encroaching onto an adjoining property and need to be relocated. However, the claim would be subject to a $2,500 deductible before your policy coverage kicks in.
As we stated earlier, these types of claims are extremely rare in most areas. The overwhelming majority of claims that we see in the title insurance industry would potentially be covered by either the standard or enhanced policies.
A few more Quick Facts:
- The enhanced policy is only available on owner occupied residential properties.
- If you’re taking out a mortgage, your lender does not require enhanced coverage.
- The company selling you the enhanced policy most likely receives 85% of the additional premium.
- Both the standard and enhanced policies offer protection against undiscovered liens, errors in public records, claims by unknown heirs, fraud & forgery prior to closing, boundary disputes, and unrecorded easements