Are All Title Policy's The Same?

I was asked to do a post explaining what an "Eagle Policy" Covers and what the difference is between the ALTA Residential and CLTA Standard Policies. Letting your buyers know what they are getting when it comes to title insurance coverage is important. You may not realize, but title companies do issue different types of policies. This may seem like major boring stuff, but your insured clients will thank you for being informed and for helping them make the right choice when it comes to selecting a title insurance policy.

To see the differences between the three, click here for a comparison.

Here is what's exciting about the Eagle Policy....

POST-POLICY PROTECTION FOR COVERED RISKS

Several important new risks are now covered on a post-policy basis. This means that some defects in title that did not exist at the time the insured purchased the property, but are now asserted by others, are covered.

These post-policy covered risks involve cases in which someone other than the homeowner claims to own an interest in the title; or has rights affecting the title arising out of leases, contracts or options; or claims to have rights affecting the title arising out of forgery or impersonation; or has an easement on the land; or has a right to limit the insured's use of the land; or in which the title is defective.

The following are several examples of this post-policy protection:

POST-POLICY FORGERY

The homeowner is covered when someone forges the insured's signature to a deed or mortgage in an effort to sell or impose a lien or restriction on their home.

POST-POLICY ENCROACHMENT

This coverage protects the homeowner if, after his or her purchase, someone else builds a structure (excluding boundary walls and fences) which encroaches on the homeowner's land.

POST-POLICY CLOUD ON TITLE

Coverage is provided when the homeowner's title is clouded because someone recorded in the land records a document containing the legal description of the homeowner's land, whether by mistake or in a specific effort to cause the insured harm, and the homeowner is prevented from completing a loan or sale transaction on their home.

POST-POLICY ADVERSE POSSESSION

Coverage is extended to a homeowner when someone claims to have the insured's title arising out of someone else's continued use and occupancy.

POST-POLICY EASEMENT BY PRESCRIPTION

The homeowner is covered in the event another party claims to have the right to use a part of the insured's land as an easement because of continuous use over time.

Previously, these types of risks were only covered if they existed on the policy date, although our original EAGLE Policy included coverage on a post-policy basis for forgery and encroachments onto the land.

Other exciting coverages include ...

EXPANDED ACCESS

The new EAGLE Policy expands access coverage to include, for the first time, actual vehicular and pedestrian access to and from the land, based upon a legal right.
The access coverage traditionally provided by title insurance was tied to a legal right of access and did not include actual access. The new EAGLE Policy affords the type of access protection most needed by homeowners.

BUILDING PERMIT AND ZONING VIOLATION

Coverage is extended to a homeowner who is forced to remove or correct existing structures that were built without a building permit or that violate an existing zoning law or zoning regulation. The zoning coverage even extends to boundary walls and fences!

The original EAGLE Policy coverage in this area was tied to forced removal, not forced remediation. Because we have found it far more likely that a homeowner would be forced to correct a building permit or zoning violation than to actually remove the structure, the coverage has been expanded in the new EAGLE Policy to specifically include forced remediation. The homeowner is covered for losses up to $25,000 (after a small deductible) for building permit violations and forced remediation of zoning violations, and up to the full Policy Amount for forced removal of structures due to zoning violations.

SUBDIVISION VIOLATION

The homeowner is covered where subdivision laws have been violated prior to the homeowner's purchase and, as a result, the homeowner is unable to obtain a building permit, is forced to correct or remove the violation, or is unable to complete a sale or loan transaction. The new EAGLE Policy continues to provide homeowners up to $10,000 (after a small deductible) for protection against risk - a benefit which homeowners who obtained our original EAGLE Policy have found most valuable.

ENCROACHMENT BY BOUNDARY WALLS AND FENCES

The homeowner is covered if he or she is forced to remove a boundary wall or fence because it encroaches onto a neighbor's land, onto an easement or over a building set-back line.

Previous policies excluded boundary walls and fences from this type of coverage. We have found that the encroachment of boundary walls and fences onto neighboring land is far more likely to occur than the encroachment of other structures and, therefore, have determined to provide the homeowner protection of up to $5,000 (after a small deductible) for these types of encroachments.

RESTRICTIVE COVENANT VIOLATIONS

Coverage is provided for violations of restrictive covenants occurring before the homeowner acquired the land, if the homeowner is forced to correct or remove the violation or if the homeowner's title is lost or taken because of the violation. Examples of such violations would include the following, if not permitted by the applicable restrictions: (1) additional buildings; (2) types of roof material; (3) color of home; (4) number of stories; and (5) types of fencing. While these coverages have been available by endorsement for some time, they were never provided automatically until our original EAGLE Policy. The new EAGLE Policy expands the coverage in this area from that provided in the original EAGLE Policy by eliminating the deductible that applied to a portion of this coverage.

How To Order An Eagle Policy

Call your local title company

The EAGLE Policy. . .peace of mind for homeowners and the professionals who serve them.