Standard vs. Enhanced Title Insurance: What You Should Know

When it comes to title insurance, there are plenty of options out there that you should be aware of. Knowing what kind of title insurance you’re getting will make a world of difference in what options you have available to you, as well as how you’re protected. But where do you start in the process? Here’s what you should know when it comes to the differences between standard versus title insurance.

What Is Standard Title Insurance?

If you’re considering getting standard title insurance from a New Jersey title company, then you should know that the policy covers the homeowner for any matters that affect the title. This applies to any matters affecting title up to and including the date of the recordation of the Deed. This is a good option for those who are considering title insurance but need to save money.

What is Enhanced Title Insurance?

Because this is a more enhanced policy, it’s going to be a bit more expensive than a standard title insurance policy. But with that price comes more protection over your title. An enhanced policy can cover as many as 28 additional risks, if not more, and also pertain to future coverage and automatic increases in coverage to cover any increased value in the property.

What Is Covered By Both Title Insurance Policies?

Both standard and enhanced policies cover a number of risks that are important to the protection of your interests. These risks include:

  • Non-recorded restrictive covenants
  • Improperly executed documents
  • Mechanic’s Lien Coverage
  • Pre-Policy forgery, fraud or duress
  • Unmarketability of the title
  • Third-Party claims on the title
  • Prior recorded liens not disclosed in the policy
  • Defective recording of documents

These are usually the most common risks faced by anyone owning property, so these aren’t something a property owner should have to worry about.

What Risks Do Enhanced Title Insurance Policies Cover?

There are more unique risks that only take place in specific circumstances, but an enhanced title insurance policy can protect you from these risks. Here are a few of the most common ones.

  • Post Policy encroachment onto insured land
  • Automatic Increase in original policy amount to cover the increase in value of the property
  • Post Policy Forgery
  • Losses due to building permit violations
  • Losses due to an existing violation of subdivision law
  • Restrictive covenants resulting in loss of title
  • Forced Removal of an existing structure that encroaches onto a neighbor’s land
  • Covering a trustee the property is transferred to a post-policy date
  • Covering anyone who inherits the property from the homeowner

This is just a short list of some of the risks any homeowner can face when it comes to the title of their property being threatened by external circumstances. Having this enhanced title insurance in place will ensure that title is maintained.

Title insurance doesn’t have to be a difficult aspect of owning property. In fact, it should be a vital part of the process to ensure that your rights over property are protected, and that you’re afforded even more protection with an enhanced title insurance policy in place.