What is the difference between the two types of owner’s title insurance?

While most people are aware of the benefits of purchasing owner’s insurance when they buy a house, most don’t realize that there are two types.

Generally, title insurance helps protect the buyer from deed errors, forgery, fraudulent sales, and other errors. In addition, title insurance will cover you if the home you purchased is later contested through a will. So, in essence, title insurance protects you from past risks. It does, however, protect you for as long as you own the property.

Lenders require buyers to purchase title insurance, but it only protects the lender’s investment in the property. There are two types of owner’s title insurance: standard coverage called ALTA 2006 and extended coverage called ALTA 1987. Endorsements can also be purchased to cover environmental risks, covenant enforcement, and water or mineral development damage.

Standard coverage title insurance covers deed errors; conveyance and public records regarding property ownership; gap protection against defects, liens, and adverse claims that occur between the title and recording date; and fraudulent sales. The most common claims against property title are liens, back taxes, and conflicting wills.

Owner’s title insurance does not cover risks that do not result in financial loss or damage; boundary walls or fences; native title claims; environmental issues; dilapidated or out of code structures; pests; restrictive covenants; claims related to bodies of water; or issues that arise after the title has been recorded.

Extended coverage provides extra protection if title defects arise, including encroachments and boundary line conflicts; unknown easements; forced removal of existing structures due to encroachment or zoning issues; prior liens; and inflation protection. This type of policy covers matters not included in official records.

You should consider purchasing a homeowner’s policy to protect your investment. The lender’s title insurance does not protect the buyer. You can only buy an owner’s title insurance policy at settlement. This policy will cover the title as long as you own the home.

The Atlantic Coast has a great deal to offer; purchase property utilizing the services of a professional title company. Licensed Florida attorneys founded Fleet Title to bring high-quality, fast, and efficient title services to the residential and commercial real estate markets throughout the state of Florida. Our attorneys have closed real estate transactions for over 25 years. At Fleet Title, you will benefit from our experienced attorneys at the cost of a title agent. To learn more about the services offered, visit fleettitle.com, call (772) 224-3338, or email them at info@fleettitle.com.