Basic Title Insurance vs. Enhanced Title Insurance

There are few things more important than protecting your home! Even the best Title Examiners and most extensive title searches cannot protect your equity and your home from matters that may not appear in public records.

A very small percentage of people in the real estate industry know that, like other insurance products, Title Insurance has products that offer a wide range of different coverage.

title search is necessary when you’re either purchasing or refinancing a home. Title Insurance protects the owners and lenders against any property loss or damages that they might experience because of any encumbrances, liens, or defects in the title to the property. Each title insurance policy is subject to specific terms, conditions, and exclusions.

By understanding the key differences between Basic Title Coverage and the Enhanced Title Coverage, it will help you make a more educated decision on which option works best for you and your needs.

There are two major key differences between these two types of coverage:

Basic Title Insurance Coverage

As the name suggests, the basic title policy covers just the basics. That includes protection against the following potential claims or red flags!

  • Claims that other parties own the property
  • Fraud, Forgery or any other wrongdoings
  • Mistakes or errors in the Public Records
  • Unknown heirs claiming interest in the property
  • Liens or Encumbrances on the title
  • Gap Coverage

Enhanced/ Extended Title Insurance Coverage

Enhanced Title Insurance policies include everything that the basic title insurance covers and adds protection against a number of additional potential risks.

  • Liens against property
  • Any zoning or building permit issues
  • Covenant restrictions and corrections
  • Any subdivision violations
  • Lack of access to property
  • Supplemental tax assessments
  • Encroachments of structures onto property
  • Encroachments of your buildings onto a neighbor’s property

Although an enhanced policy is roughly 10% higher than the basic policy, it’s a small cost to the homeowner. The ability to considerably reduce their risk on one of the largest investments they will make is worth choosing enhanced coverage over basic coverage.

If you would like more information on the differences between a basic policy and an enhanced policy, please feel free to contact me at jnichols@libertytitle.com.

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