Chapter 10: Specialized Title Insurance Endorsements
Common Endorsements in Title Insurance
Title insurance endorsements are additional provisions that can be added to a standard title insurance policy to modify or expand the coverage provided. Here are some common endorsements in title insurance:
Survey Endorsement: This endorsement provides coverage for issues related to the survey of the property. It may cover discrepancies or conflicts in boundary lines, encroachments, or survey-related matters that are discovered after the policy is issued.
Access Endorsement: This endorsement provides coverage for loss or damage resulting from a lack of legal access to the property. It protects against situations where there is no physical or legal access to the property, or where access is significantly impaired.
Zoning Endorsement: This endorsement addresses zoning-related risks and provides coverage for losses arising from violations of zoning regulations. It may cover situations where the property use is not in compliance with the applicable zoning laws.
Subdivision Endorsement: This endorsement is relevant for properties located in a subdivision or planned development. It ensures that the insured title includes the right to use common areas, amenities, or community facilities associated with the subdivision.
Encroachment Endorsement: This endorsement covers losses resulting from encroachments onto or from the insured property. It provides protection against disputes or claims arising from structures, fences, or other improvements that encroach onto neighboring properties or vice versa.
Mechanic’s Lien Endorsement: This endorsement protects against mechanic’s liens filed by contractors or suppliers for work or materials provided for improvements on the property. It ensures that the insured title is free from mechanic’s liens.
Water Rights Endorsement: This endorsement provides coverage for water rights associated with the property. It addresses issues related to water usage, riparian rights, or water access that may impact the insured title.
It’s important to note that the availability of endorsements may vary depending on the jurisdiction and the title insurance company. The specific terms, conditions, and coverage provided by each endorsement will also vary. It’s recommended to consult with a title insurance professional or a real estate attorney to determine the appropriate endorsements for your specific needs and circumstances.
Additional Coverage and Protections
In addition to the standard coverage provided by title insurance policies, there are additional coverage options and protections that can be considered. These additional options can provide enhanced coverage and address specific risks. Here are a few examples:
Enhanced Owner’s Policy: An enhanced owner’s title insurance policy offers broader coverage compared to a standard policy. It may include additional protections for issues such as post-policy forgery, building permit violations, certain encroachments, and more. The enhanced policy provides an extra layer of protection for homeowners.
Homeowner’s Endorsements: Homeowner’s endorsements can be added to an owner’s title insurance policy to provide specific coverage for common homeowner concerns. For example, an endorsement may offer coverage for identity theft, restrictive covenant violations, zoning law violations, and other risks that directly affect the homeowner’s use and enjoyment of the property.
Gap Coverage: Gap coverage protects against title defects that may arise between the time of the initial title search and the closing of the transaction. It covers any intervening liens or encumbrances that may appear during this period, ensuring that the buyer’s interest is protected.
Leasehold Policy: In leasehold transactions, where the buyer is acquiring the leasehold interest rather than the fee simple interest, a leasehold policy can be obtained. This policy protects the buyer’s interest in the leasehold estate and provides coverage for lease-related issues such as lease termination, non-compliance, or leasehold priority disputes.
Extended Coverage: Extended coverage options can be considered for specific risks that may be unique to the property or location. For example, flood insurance or earthquake insurance endorsements can provide coverage for damage caused by these specific events, which are typically excluded from standard title insurance policies.
It’s important to note that the availability of these additional coverage options may vary depending on the title insurance company and the jurisdiction. The specific terms, conditions, and premiums associated with these options will also vary. Consulting with a title insurance professional or a real estate attorney is recommended to explore the additional coverage options and protections that best suit your needs and circumstances
Customizing Title Insurance Policies
Title insurance policies can often be customized to meet specific needs and address unique circumstances in a real estate transaction. Here are some ways in which title insurance policies can be customized:
Coverage Amount: The coverage amount of a title insurance policy can be customized to match the purchase price or the loan amount in a real estate transaction. This ensures that the policy provides adequate coverage for the value of the property or the loan being obtained.
Additional Endorsements: As mentioned earlier, title insurance policies can include various endorsements to modify or expand the coverage. These endorsements can be selected based on specific concerns or risks associated with the property or the transaction. Common endorsements include survey endorsements, access endorsements, zoning endorsements, and more.
Special Exceptions: While title insurance policies typically include standard exceptions to certain risks, additional specific exceptions can be added to address known issues or concerns about the property. This can help clarify and limit the coverage provided by the policy in relation to those specific matters.
Tailored Protections: Title insurance companies may offer tailored protections or endorsements based on the specific requirements or concerns of the parties involved. For example, in commercial transactions, customized endorsements can be added to address environmental liabilities, leasehold interests, or development-related risks.
Extended Coverage: Depending on the circumstances, extended coverage options can be explored to address unique risks or concerns. These may include coverage for specific types of encroachments, mechanic’s liens, or other issues that are of particular importance in the transaction.
It’s important to note that the availability of customization options may vary depending on the title insurance company and the jurisdiction. Additionally, customized policies may require additional underwriting and may come with associated costs. Consulting with a title insurance professional or a real estate attorney is recommended to understand the available customization options, their implications, and the associated costs to tailor the title insurance policy to your specific needs and circumstances.