Can you be a little more specific about the types of claims, or risks, covered by title insurance?
A: Sure. First understand there are basically three different levels of coverage: Standard coverage, extended coverage, and our most comprehensive "EAGLE Policy" coverage.
Standard coverage handles such risks as:
- Forgery and impersonation
- Lack of competency, capacity or legal authority of a party
- Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner)
- Undisclosed (but recorded) prior mortgage or lien
- Undisclosed (but recorded) easement or use restriction
- Erroneous or inadequate legal descriptions
- Lack of a right of access
- Deed not properly recorded.
An extended coverage policy may be requested to protect against such additional defects as:
- Off-record matters, such as claims for adverse possession or prescriptive easement
- Deed to land with buildings encroaching on land of another
- Incorrect survey
- Silent (off-record) liens (such as mechanics' or estate tax liens)
- Pre-existing violations of subdivision laws, zoning ordinances or CC&R's
Subject to availability in your locale, First American's EAGLE Policy covers all of the risks listed above, plus:
- Post-policy forgery
- Forced removal of improvements due to lack of building permit (subject to deductible)
- Post-policy construction of improvements by a neighbor onto insured land
- Location and dimensions of insured land (survey not required)
As with any insurance contract, the insuring provisions express the coverage afforded by the title insurance policy and there are exceptions, exclusions and conditions to coverage that limit or narrow the coverage afforded by the policy. Also, some coverage may not be available in a particular area or transaction due to legal, regulatory or underwriting considerations. Please contact us for further information.