What is the difference between a Standard and Enhanced Owner’s Policy?

When purchasing a home, one crucial aspect to consider is title insurance, which protects you from financial losses that may result from defects in your property’s title. As a prospective homeowner, you will typically be presented with two types of owner’s title insurance policies: the standard and enhanced policies. While they both serve the same purpose, there are notable differences between the two.

Standard Owner’s Policy in Title Insurance

The standard owner’s policy is the most basic type of title insurance policy available. This policy covers common title issues such as errors in public records, undisclosed heirs, and forged documents. The policy provides coverage for the purchase price of the property and lasts for as long as you, the policyholder, own the property. This type of policy is beneficial for unforeseen issues that may arise after you purchase your home, such as a third party claiming ownership of your property. However, it is important to note that it doesn’t cover everything, such as zoning or building permit violations, encroachments, or boundary line disputes.

Enhanced Owner’s Policy in Title Insurance

On the other hand, the enhanced owner’s policy is a more comprehensive option that provides wider coverage than the standard policy. This policy includes the same coverage as the standard policy but also offers additional protection against risks such as zoning violations, building permit violations, and post-policy forgeries. The policy may also include coverage for encroachments, boundary line disputes, and easements. The enhanced policy offers homeowners greater peace of mind by providing added protection against potential legal and financial issues that may arise in the future, which can also help to protect your investment.

However, it is important to keep in mind that the enhanced owner’s policy is more expensive than the standard policy. Additionally, the coverage limit for the enhanced policy is typically higher than that of the standard policy, which may not be necessary for every homeowner. The specific terms and conditions of the policy can also vary depending on the jurisdiction and insurer.

Should I choose a Standard or Enhanced title insurance policy?

Ultimately, the decision to choose between the standard and enhanced owner’s policies depends on various factors such as the location of the property, potential risks associated with the property, and your personal risk tolerance. If you are purchasing a property in an area with a history of property disputes or other title issues, an enhanced owner’s policy may provide the extra protection you need. Similarly, if you are purchasing a property with a complex history or unique features that may increase the risk of title issues, an enhanced policy may be a good investment.

When deciding which policy to choose, it is important to carefully review the terms and conditions of each policy to ensure that you fully understand what is covered and what is not. With that being said, it is essential to have title insurance to protect your investment and ensure a secure future in your new home.