My good friend Suzi from Mississippi recently asked me to write a post covering 'Enhanced Coverage Title Insurance'...she used the term "EAGLE POLICY" which specifically refers to a product offered by large underwriter First American Title Insurance Company, FANTIC. I am not an agent for FANTIC, therefore I do not speak for them!
Let me lay some groundwork first!
ALTA, The American Land Title Association, is a 'national' organization which is more or less the unofficial voice of the title insurance industry...they attempt to make title insurance uniformly understandable nationally no matter in what state a property is located!
Keeping in mind the 'local' aspect of real estate...and its state by state regulation by respective insurance commissions or other state governmental agencies...Speaking about title insurance in ways that can be applied nationally and uniformly is tricky and almost impossible! Even though there are tremendous similarities state to state, there are likewise significant differences which make any treatise on the subject challenging if not impossible...so I will attempt to address these matters generally and let the hearers and consumers draw their own conclusions!
Having said that, 'The Eagle Policy' was FANTIC's attempt to 'go beyond' standard coverages as approved for use nationally by ALTA! Justifiably or not, the 'Eagle' product is part enhancement of coverage and part 'marketing ploy' to increase revenues!!!
The cost for a typical 'enhanced coverage policy' in Pennsylvania is approximately 10% higher than a standard policy and about $50.00 to $100.00 higher for endorsement coverages...in plain speak, on a $300,000.00 basic rate policy in PA, the charge would be an additional $185.88, plus $50.00 over the normal endorsements charge for typical lenders policies or $200.00...making the total out of pocket 'additional' expense to the consumer around $235.88 higher than traditional coverage on a $300,000.00 transaction with both owner's policy and lender's policy to be issued! Of course on cash transactions there would only be the $185.88 difference in costs!
Hope you're still with me!
At this point I need to make a kind of disclaimer...it would be a great idea and my suggestion to obtain specific information on any title insurance products directly from an agent for that particular Title Company...That way you're sure you're comparing apples to apples!!! And your getting it right from the underwriter's mouth!
Now, let's move on to what the coverages are! Again, I will address 'generically' an 'enhanced title policy' such as I myself am familiar with...keeping in mind these will differ somewhat from Title Insurer to Title Insurer and state to state.
Over and above a standard ALTA owners policy, a typical enhanced coverage policy will add 25 to 30 'covered risks'! A brief outline follows!!!
Our basic ALTA coverage protects against:
• Someone claiming an ownership interest in
your title.
• Leases, contracts or options affecting your
title.
• Someone claiming to have rights affecting
your title due to forgery or impersonation.
• Someone having a right to limit your use
of the land.
• Unmarketability of your title.
• A defective title.
In addition to the coverage provided in the
traditional ALTA Owner's Policy, an enhanced coverage policy
offers new and expanded coverages ***. You can purchase
coverage against losses caused by:
• Zoning violations.
• Subdivision law violations.
• Improvements that encroach into an
easement.
• Building permit violations.
• Covenants, conditions and restrictions.
• Lack of vehicular and pedestrian access.
• Supplemental assessments arising as a result
of construction or transfer prior to the policy
date.
• Damage to your house caused from someone
with easement rights.
• Someone refuses to buy your land because
your neighbors' structures are on your land.
• Your house or lawn and trees are being
damaged by someone with rights to dig a well
or mine.
*** Some coverages are subject to deductibles &
liability caps.
This is by no means a comprehensive treatment of this subject, but a mere overview for discussion purposes...consumers interested in additional information should contact the underwriter of their choice, or call us if you would like any copies of any of our brochures explaining these programs in greater detail!!!
So in the end, it is like buying a new car...do you want the stripped down version which will probably get you from point A to point B nicely, or do you want the version with all the bells and whistles...oh yes, and the plush leather seats!!!
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