As a real estate professional, you help your clients make informed decisions when buying or selling a property. You know how to help them choose the right property and minimize their risks during and after the closing.
Protecting an ownership interest is crucial to someone buying a piece of real estate. You likely advise all of your clients to pay for a buyer’s policy in addition to the lender’s policy required if they finance their purchase. In certain scenarios, you may need to talk to your clients about the value of upgrading from a standard title insurance policy to an enhanced policy.
What does an enhanced title insurance policy cover that a standard policy does not?
Standard policies typically cover defects in the public record
A title insurance company does a review of public records when it underwrites a policy. Only by affirming that there are no blemishes on title can the company securely ensure the ownership of the home.
A standard policy protects a new owner from a third party claiming ownership, issues that arise because of improper document execution during their closing and issues with the documents relating to activity like forgery before the closing. Defective state records and title issues that prevent someone from selling the home will usually all have coverage under a standard policy.
An enhanced title policy protects owners from issues that weren’t already on the public record and did not pre-date their closing.
What does an enhanced policy cover?
Enhanced title policies protect you against issues relating to zoning, unrecorded liens or easements, restrictive covenants, adverse possession and even forgery that occurs after the issuance of the policy.
For example, if someone shows up with a deed that they claim shows that they’re the owner of the property and the date on the deed is after your client purchased the property, a standard title policy may not protect them. An enhanced policy typically would.
Paying a little more for an enhanced policy can offer your clients enhanced peace of mind in addition to more coverage. Thinking about how to best protect your clients will make you a competitive and highly recommended real estate professional.