While title insurance may be viewed as just another extra cost, it actually provides value to the homeowner. Title insurance is used to protect you from any past title defects associated with the home. There are two types of title insurance: owner’s and lenders. Purchasing both can provide you with peace of mind over the course of your life in the home. In addition to the two different types of title insurance, there are also different policy types. In this blog, we will discuss standard versus enhanced title insurance and its coverage.
What is a Standard Title Insurance Policy?
Understanding the differences between a standard and enhanced policy will allow you to make an educated decision on the amount of coverage that you need. A standard policy will cover the basics and will protect you the following:
- Claims by other parties that they own the property
- Defective recording of the documents
- Mechanic liens and prior recorded liens not disclosed
- Mistakes in the public record
- Improperly executed documents
- Third-party claims
- Previously unknown heirs claiming an interest in the property
- Pre-policy fraud, forgery, and other malfeasance
What does an Enhanced Policy Cover?
An enhanced policy will cost more than the standard policy but includes more protection and reduces risk for the homeowner. In addition to the protection outlined in the standard policy, an enhanced policy coverage includes:
- Insures heirs of the homeowner for the property
- Increases coverage automatically as value increases
- Supplemental tax assessments
- Post policy forgery
- Encroachment of structures onto your property or of your buildings onto a neighbor’s property
- Losses due to permit violations and more
- Liens against the property
- Zoning and building permit issues, including covenant restrictions and corrections
- Lack of access to the property
Standard vs. Enhanced Title Insurance: Which is Right for You?
Title insurance is used to provide protection for past defects and can provide a safety net for your future. Choosing a standard vs. enhanced policy depends on how far you would like to cast your safety net. After going through the benefits for both, many people choose the enhanced policy for extra coverage and protection into the future.