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Which Title Insurance Policy Should I Choose?

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November 22, 2011

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Blog, Title Insurance

Standard, Extended, and ALTA Homeowner's Title Insurance Comparison

What is the difference between the various types of owner’s title insurance policies?

We hear this question often. There are three types of owner’s policies; Standard, Extended, and ALTA Homeowner’s. It’s important to note that the ALTA Homeowner’s Policy is specified by default on the NWMLS (Northwest Multiple Listing Service) Form 22.

Title Insurance Choices

Why would the ALTA Homeowner’s policy be the top choice? The ALTA Homeowner’s policy offers the highest level of protection for homeowners that exceeds the coverage of the Standard or Extended policies. Some home buyers may not be aware of the risks to title that exist and thus not understand the explicit value of broader coverage. Nonetheless, buyers should know that they always have a choice.

What makes the ALTA Homeowner’s policy unique?

We’ve written an article specifically about the ALTA Homeowner’s policy that explains the benefits to the homeowner, the deductibles, post closing coverage, and the cost.  For further information, please click the following link:

ALTA Homeowner’s Policy in Plain English

Standard, Extended, and ALTA Homeowner’s comparison

In comparing the three policies, it’s easier to make an informed decision if you can see the risks covered in a list or tabular format. The side-by-side title policy comparison below will make it clear what makes each policy unique.

Please keep in mind that if you have questions regarding your title insurance policy or level of coverage, we are here to help.

Policy Protection Against the Risks of:

ALTA Homeowner’s Standard Extended
Record defects, liens, encumbrances, adverse claims or other matters not known or disclosed to the new owner that attach before date of policy
Forgery or Fraud in connection with the execution of documents
Undue influence on Grantor or mental incompetence of Grantor
Undisclosed or missing heirs
Wills not properly probated, mistaken interpretation of Wills and Trusts
Conveyance by minor(s), Conveyances by Corporation or Partnership without proper legal authority
Incorrect legal descriptions, non-delivery of deeds
Delivery of Deed after Death of Grantor
Clerical errors in recorded legal documents
Unmarketability of title as insured or lack of legal access
Unrecorded liens
Survey and Boundary questions
Claims of parties in possession not disclosed by the public records
Easements or claims to easements not disclosed by public records
An existing violation of a subdivision law or regulation affecting the Land: 

  • You’re unable to obtain a building permit
  • You are forced to correct or remove the violation; or
  • Someone else has a legal right to, and does refuse to perform a contract to purchase the Land, lease it or make a Mortgage on it.

This covered risk is subject to:

  • A customer deductible amount of either 1% of Policy Amount or $2,500.00. (whichever is less)
  • Title Company’s Maximum Liability is $10,000.00
Certain zoning issues that force you to remove or make modifications to your existing structure. 

This covered risk is subject to:

  • A customer deductible amount of either 1% of Policy Amount or $5,000.00. (whichever is less)
  • Title Company’s Maximum Liability is $25,000.00
You are forced to remove your existing structure (s) because it (they) encroaches onto your neighbor’s land. 

This covered risk is subject to:

  • A customer deductible amount of either 1% of Policy Amount or $2,500.00. (whichever is less)
  • Title Company’s Maximum Liability is $25,000.00

Post Closing Coverage:

Another party owns an interest in your title
Another party has rights affecting your title resulting from leases, contracts or options
Another party has rights affecting your title resulting from leases, contracts or options
Another party has an easement on the property
Your title is defective
Another party has the right to limit the use of your land
Your neighbor builds any structures, after the policy date, other than boundary walls or fences, which encroach onto the land

 

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  1. Pingback: Mortgage Fraud Quiz | Ticor Title Northwest

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