Home Buyer Quick Facts by ALT Title
Buying a home in PA? If you are required to purchase a title insurance policy, you may be asked if you're interested in upgrading to an Enhanced Policy. Here are some key features of the enhanced coverage, which may help you decide if it fits your situation.
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.
The Enhanced Policy has a one-time premium that is paid at settlement offering consumers comprehensive protection when you buy real estate and protects both the past and the future for as long as you own the property.
An Enhanced Homeowner’s Title Insurance Policy offers coverage for as long as you own your property, and its additional coverage may make sense for some very specific - and somewhat rare - situations. And not every purchase transaction is eligible for the Enhanced Policy so be sure to read the requirements below.
Here are the Key Features of the Additional Coverage
Post Closing Fraud
It only takes a forged signature and an unsuspecting notary for a fraudster to transfer your property’s ownership to someone else. The Enhanced Homeowner’s Title Insurance policy offers you protection against these transactions for as long as you own the property.
There are third-party services that charge a hefty monthly or annual fee to notify you if something changes with your title. However, if corrective measures are needed to restore the title, there is usually an extra fee. But, there is another option. There are 28 counties in PA offering FREE title monitoring services which notify you when there’s a change to your title. And if the transaction was fraudulent, and if you have the Enhanced Homeowner’s Title Insurance Policy, the cost to have the title restored is covered.
Corrective Measures
For older properties with extensive renovations or multiple additions over the years, there may be some benefit offered under the Enhanced policy for corrective measures for work performed without proper permits or for code violations at the time the work was performed.
Landlocked
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.
Escalation Clausse
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.
Encroaching Fence
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.
Eligibility for the Enhanced Title Policy
Before you pay a premium for the additional coverage, make sure that your purchase qualifies. The enhanced policy is only available for properties that meet specific criteria. First and foremost, the property must be zoned as residential and the buyer must occupy the property. Furthermore, the property cannot have more than 4 family dwelling units.
A few more facts:
- If you’re taking out a mortgage, most lenders do not currently require the borrower to purchase expanded lender’s coverage.
- Both the standard and enhanced homeowner’s policies offer protection against undiscovered and/or unpaid liens & judgments created by a previous owner, errors in public records, claims by unknown heirs, fraud & forgery prior to closing, unrecorded easements, and most importantly the legal fees to defend the rights of the policy holder.
- The cost of the Enhanced Policy is 10% more than the cost of the Standard Policy
If you would like more straight answers regarding the Standard vs Enhanced Title Policies, please feel free to reach out to us. Call, email or text us.
Compare Quotes for Standard vs Enhanced
You can easily compare the cost of the Standard vs Enhanced policy on our Title Calculator. Your quote will contain the Standard policy by default. Use the grey checkboxes to change coverage options and the quote will instantly recalculate.
