When you buy a new piece of real estate , you will be offered a title insurance policy to protect yourself. This usually brings a bit of reassurance should something go awry. But did you know that there are different types of policies offering different coverage?
Next to the standard title insurance policy, an enhanced policy is one of the most common options. But what is it? Is it worth the extra cost? Let’s take a look at each one of these.
What Does a Title Insurance Policy Do?
When you purchase a new piece of real estate, you want a clear title. So, public records are scoured to find anything and everything pertaining to the property all the way back to its beginning. This title search is performed by title experts looking for issues such as judgments, liens, outstanding taxes, encroachments, and so forth. They also confirm that the seller has the right to sell the property.
After the title search is done a title insurance policy can be issued. This is a protection against basic title issues like judgments, liens, forgery, fraud, unrecorded documents, and more.
Going forward, if any of the covered title issues arise, you are protected.
Is an Enhanced Policy Different?
An enhanced policy has everything that a traditional title insurance policy does - and then some. Hence how it got its name. A few of the coverages it has that you will not find with a standard policy include:
Increases in policy coverage as property value increases
Covers the interest of your heirs in the property
Will protect a trustee if a policy is transferred after a certain date
Coverage for forged documents
Protects against encroachments onto insured land that occur after the date of purchase
Protects both pedestrian and vehicular rights of access
Insures against losses due to building permit violations
Insures against losses due to an existing violation of subdivision law
Insures against post policy structural damage from a third-party easement for mineral extraction
Keep in mind that this list is not exhaustive. There are a few more coverages that you will get when you decide to get an enhanced policy rather than standard title insurance.
Is An Enhanced Title Insurance Policy Worth It?
Making the decision as to whether or not you should purchase an enhanced title policy is a personal choice. First, you will want to consider your financial ability as this title insurance is a bit more costly than the standard policy. Since you are already putting out a lot of money for your down payment, closing costs, etc., it is up to you to decide whether you can afford - or even want - to pay for the enhanced title insurance.
Further, you will want to assess your risk tolerance. By not choosing an enhanced policy, you get basic standard coverages but it doesn’t cover everything that could go wrong. Are you willing to take that risk? One small title issue could have big consequences if you aren’t covered by a title insurance policy.
Title Insurance with Conestoga Title
At Conestoga Title, we want all of our clients to get the most out of their title insurance so that they can benefit from its protection for years to come. Understanding title insurance is important.
If you have questions about title insurance, contact us today at 800-732-3555.