If a buyer opts to purchase title insurance at settlement, the buyer will be faced with deciding whether to purchase standard or enhanced title insurance.
All potential title claims covered under standard version are covered by the enhanced version. These include:
- Third party claims in title
- Improperly executed documents
- Defectively recorded documents
- Pre-policy fraud, forgery or duress
- Liens or encumbrances on title
- Unmarketable title
However, the enhanced version covers an additional 20+ risks, including:
- Forced removal of a structure due to encroachment (i.e. if the buyer purchased a property and it was discovered that a garage on the purchased property falls on a portion of the neighbor’s land, enhanced insurance would cover the cost of removing the garage)
- Building permit violations (i.e. if the seller finished a basement and never got the appropriate building permits, the cost of obtaining the building permits would be covered by enhanced insurance)
- Post-policy forgery
- Vehicular and pedestrian access (i.e. the enhanced policy ensures that an owner can legally drive and walk to access the property).
- Identity theft (i.e. if a fraudster opened a home equity line of credit in the policyholder’s name and drew down on the line of credit, the amount of loss would be insured by the enhanced policy)
In addition, the enhanced policy increases the value of coverage up to 150% of the original value, to account for appreciation in home value. For instance, if the buyer originally purchased a house for $500,000.00, and ten years later it was worth $750,000.00, the enhanced policy would insure an amount of up to $750,000.00.
Do you have a question about whether you or your client should purchase standard or enhanced title insurance? Call Highland Title to speak with one of our experienced title attorneys – (703) 723-3300.