Is Enhanced Title Insurance Right For Me?
No royal has ever appreciated getting the boot from their castle. And while your home may not be Buckingham Palace and you might not be Queen Elizabeth II, you still don’t want to worry about fighting for your right to your property. Think of title insurance like the Queen’s Guard, securing your interests and making sure you’re safe. When you purchase a property, your lender will most likely require proof of title insurance. This coverage will protect you if any disputes about your property — such as liens, undisclosed heirs and intrusions on your property — arise, both establishing your rights as an owner and helping to pay for legal fees associated with these issues.
There are two main types of title insurance — owner’s and lender’s. Lender’s insurance protects the lender’s interest in your property from any disputes. Owner’s insurance, on the other hand, insures your rights to the property as the owner of it. A lender’s policy is almost always required when buying a home, but adding owner’s insurance is up to you.
You can also choose between a standard title policy or an enhanced one. An enhanced owner's title insurance policy is another way to safeguard yourself and your property against disputes. Below, we’ll discuss the differences in these policies.
- Enhanced title policies protect against common and uncommon property and ownership disputes.
- An enhanced title policy will increase in value along with your home.
What is an enhanced owner’s title insurance policy?
The name says it all: enhanced title insurance is merely a more advanced version of an owner’s title policy with more protections in place. While basic owner’s title insurance offers fundamental protection against a few common claims, the enhanced version provides protections against those claims and others that might arise. For more about basic claims covered by this type of coverage, check out our guide on owner's title insurance. For information on how basic and enhanced title insurance differs, read on.
Standard vs. enhanced title insurance
If a standard title insurance policy is a rain poncho, enhanced title insurance is a wetsuit. It offers more robust protection against any retroactive issues that might arise after the U-Haul leaves, and the papers are signed while still offering the protection provided by a standard policy.
Basic title insurance will cover the following:
- Claims against your ownership of the property
- Mistakes in the public record
- Unknown heirs to the property claiming ownership
- Fraud and forgery
- Defective recording of documents
In addition to those protections, enhanced title insurance will offer the following protections:
- Liens against the property
- Zoning issues
- Lack of access to the property
- Encroachment of structures onto your property
- Subdivision violations
What additional protection do I get from enhanced title insurance?
To put it simply: enhanced title coverage offers more protection against a wider variety of issues you may run into post-policy. And while a basic policy will remain the same throughout the years, an enhanced title policy will grow with you. As your home increases in value, so will the amount of coverage you receive.
An enhanced title policy will increase in value along with your home.
How much does enhanced title insurance cost?
An enhanced title policy typically costs a bit more than your standard addition — but the good news is, this is a one-time cost instead of a monthly payment. With up to $250,000 of liability written on an insurance policy, standard title coverage will run you about a $4.10 premium per $1,000. If you opt for enhanced, you’ll pay about $4.92 per thousand. Once you figure out how much homeowner insurance you need, you can then calculate the price differences.
Is enhanced title insurance worth it?
Determining whether this expense is worth it depends on how safe you want to feel. If you’re comfortable trusting that no claims will come against your property, a standard policy could be the right bet; but if you want to make sure that your property has protection for as long as you own it, maybe opt for something extra. In some cases, the seller may even pay for enhanced title insurance to ensure the title is protected and clear before selling.
It’s important to note also that it’s possible to save money when seeking title insurance. Seeking a reissue or substitute rate from your provider can help ease some of the cost of title insurance.
Title insurance is another protection available to you and your home. In the event that an undisclosed heir demands your property, or a neighbor builds a fence through your backyard, this policy will make sure you remain protected and able to fight back. For more information on ways you can protect yourself with home insurance, visit our home insurance learning center.