Enhanced Title Policies: What You Need to Know
While title insurance policies cover many of the major title risks a property owner might experience, there are still a few important things that they don't cover. To remedy that, title insurers have created something called an enhanced owner's policy-- a more comprehensive form of coverage that can offer property owners an added degree of financial security.
What Does Enhanced Title Insurance Cover?
Enhanced title insurance covers a variety of major title issues, including:
- Forced structure removal due to:
- Zoning violations
- Permitting issues
- Mechanic's liens: If a previous owner of your property hired contractors or subcontractors to enact repairs or renovations, and didn't pay them (or if the general contractor did not pay a subcontractor), they can file a claim against your home, called a mechanic's lien, in an attempt to get the funds they're owed.
- Property Appreciation: Property values increase over time, but the amount of title coverage on standard policies does not. In order to protect the equity in your property, many enhanced owner's policies insure for the current value, not just the purchase price of the property.
- Property Transfer to Heirs/Beneficiaries: Standard title policies often only cover the original property owner under the policy-- and won't transfer to anyone who has inherited the property over time. In comparison, a lot of enhanced title policies offer transfer protection in order to make sure heirs benefit equally from the insurance policy, and aren't forced to purchase a brand new one.
- Adverse Possession: If someone uses your property "openly, exclusively, and notoriously" for a certain period of time (7 years in many states), the title could legally become theirs. An enhanced owner's policy can protect you against this, by funding your legal defense and reimbursing you for the property's value in the case that you do lose it.
So, while an enhanced owner's policy might not be for everyone (especially because it does cost a bit more) it can be an excellent way to protect your property from a variety of legal and financial threats.
To learn more about enhanced title insurance, contact the experts at Florida Title Company for a free consultation.