YOU ASK:

At what instances should I get extended coverage on title insurance?

WE ANSWER:

If you think you can get by with standard title insurance coverage, we recommend that you go with that so as to save on premiums.

However, if there is cause for concern, you can also look into getting extended coverage for your title insurance. The main advantage of an extended title insurance cover is that it will also pay for post-policy risks and claims.

Some instances where you should consider extended title insurance coverage would be:

  • When you are buying a property, where lien claims may be complicated further by bankruptcy issues.
  • There are legal complications related to the heirs of the policy.
  • When you are concerned that there are some problems to the title that may occur after the policy's effective date. Remember, standard title insurance will only cover events or acts before the policy is made effective.
  • There are concerns that the contractor or subcontractor was not paid for the job they did on the house and may file a mechanic's lien against the property. This also includes claims that are unrecorded (or not yet reflected in the public documents due to delays or errors) and are for materials, services and labor used in the house.
  • Possibility of easements and encumbrances that are not recorder.
  • Conflicts as to the boundary and resulting encroachments. (For example, you built a fence around your house and it was determined that you are encroaching on your neighbor's property because your legal documents recorded the wrong boundaries. The insurance will pay for the expense of removing the fence, as well as any loss it will bring you.)
  • Unpatented mining claims.
  • Possible coverage for zoning violations as well as other governmental rules - such as building permit. This would cover also for building permits that have gone past the due date and the removal of structures that do not follow the building permit regulations.
  • Expanded access.
  • Subdivision violations.
  • Post-policy forgeries and acts of fraud.
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