Title Insurance Explained

What’s the difference between a standard and enhanced title insurance policy for my home?

1.   Title insurance is purchased for a one-time fee at closing and lasts for as long as the buyers or their heirs have an interest in the property.  However, it is typically re-issued every time a homeowner refinances the property.  Title insurance is required by the mortgage company when purchasing a home and usually when refinancing.  It is always recommended that even cash purchasers obtain title insurance to protect their investment.

The mortgage company only requires a Standard Title Policy (this is sometimes called the Lender Policy).  An Enhanced Title Policy (sometimes called the Owner’s Policy) is only slightly more expensive but covers many potential issues with title that are not covered by the standard policy.

Only the enhanced policy fully protects the buyer should a covered title problem arise with the title that was either hidden, not disclosed, or not found during the title search.  Possible hidden title problems can include:

¨ Errors or omissions in deeds

¨ Errors in examining public records

¨ Fraud & forgery

¨ Conflicting wills

¨ Undisclosed heirs

¨ Building permit issues

¨ Violations of setback requirements

¨ Forced removal of a structure

¨ Unrecorded easements

¨ Unrecorded liens

¨ Post policy issues that arise

The standard policy provides common protections for the issues that concern the lender.  The enhanced policy provides assurance that the title company will stand behind homebuyers, monetarily and with legal defense, if needed, if a covered title problem arises after a home is purchased.  However, there are deductibles associated with the enhanced policy.