Enhanced Title Policies & ALTA Best Practices
Enhanced Title Insurance Policy
An enhanced title insurance policy refers to upgraded coverage, such as additional coverage for building violations or zoning violations among other possibilities. A policy from American Land Title Association (ALTA) offers this option, although for most owners the base ALTA residential policy is often all that’s needed for most homeowners.
The name “enhanced” explains exactly what this more advanced type of owner’s policy includes. A basic owner’s title insurance policy provides essential protection against common claims, while an enhanced title insurance policy offers protection against those claims and other possibilities that might arise.
Every owner, like every property, is unique. With that in mind, there are circumstances that can make purchasing specific additional coverage important. This depends on any unique issues with a property, or endorsements. One example: if a home is purchased in a development which has private roads, the homeowner may want further assurance that they have the right to travel these roads in perpetuity. Your title company can add an expanded content endorsement to the policy that would give you the coverage you need for this type of issue.
In short, an owner's enhanced title insurance policy is an additional way to safeguard yourself as the buyer, and your property, against any disputes.
Basic title insurance covers:
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Claims against your ownership of a property
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Mistakes in the public record
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Unknown heirs claiming ownership
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Forgery and/or fraud
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Defective document recording
Enhanced title insurance provides the above coverage as well as covering:
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Liens against the property
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Zoning issues
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Lack of property access
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Encroachment of structures on the property
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Subdivision violations
ALTA Homeowner’s Policy of Title Insurance
When you purchase a one to four person family residence, if you’re considered a Natural Person - which means that you are not a commercial or legal organization or entity - you have the right to purchase an enhanced owner’s policy of title insurance.
The enhanced owner’s policy provides coverage that goes above and beyond what a standard owner’s title insurance policy offers.
The additional coverage will add an additional premium to the policy of 10-20%. The exact amount depends on the jurisdiction in which it’s issued.
Here’s a comparison of the two types of policies:
As you can tell, there are some differences in coverage. This chart is only an example, representing a few of the differences in policy coverage.
If you’d like to learn more about what an enhanced owner’s policy offers, reach out to us at Conestoga Title. We will connect you to one of our skilled, knowledgeable agents who can assist with this purchase, and help you make the decision that’s best for your specific situation.