Title insurance protects homeowners and lenders from potential disputes over property ownership and title defects. When purchasing a home, obtaining title insurance can be a requirement for a seller and/or buyer but they rarely understand what kind of coverage they get. Here is a simplified comparison between Standard, Extended, and ALTA Homeowner’s (AHOP) insurance policies.
Title Insurance Choices
There are three main levels of coverage: Standard, Extended, and ALTA Homeowner’s (AHOP) policies. Each provides different levels of protection, ensuring homeowners can choose the best fit for their needs.
Standard Coverage
The most basic option, Standard coverage, protects against:
-Forgery and impersonation.
-Lack of competency, capacity, or legal authority.
-Deeds not joined by necessary parties.
-Undisclosed (but recorded) prior mortgages or liens.
-Erroneous legal descriptions.
-Lack of right of access.
-Deeds not properly recorded.
-This policy is widely used and covers many common title issues.
Extended Policy
The Extended policy includes all Standard protections and adds coverage for:
-Unrecorded liens.
-Survey and boundary questions.
-Claims from parties in possession not disclosed by public records.
-Easements not disclosed by public records.
-Off-record matters like adverse possession claims.
-Pre-existing violations of subdivision laws or zoning ordinances.
-This policy is ideal for those seeking broader protection, especially for commercial or bare land.
ALTA Homeowners Policy (AHOP Policy)
The ALTA Homeowners policy, or AHOP Policy, offers the most comprehensive protection. It covers everything in the Standard and Extended policies, plus:
-Post-policy forgery.
-Forced removal of improvements due to lack of permits.
-Neighboring structures encroaching on insured land post-policy.
-Coverage for zoning issues requiring modifications or removal of structures.
-Post-closing coverage for various title defects.
-This policy provides the highest level of protection, ideal for buyers seeking peace of mind.
Making an Informed Decision
Choosing the right title insurance policy is vital for protecting someone’s investment. Understanding these differences empowers clients in selecting the coverage that best suits their needs. For further details or assistance, contact our title department.
