For most people, buying a home is the biggest financial investment they will ever make and the largest assets they will ever own and it needs to be insured. It is not just a house, it is an investment for their family. Sullivan, Williams and Quintin (SWQ) recommend buyers and borrowers should consider purchasing owner’s title insurance and here are the reasons why.
Post Policy Protection
The policy will cover the insured for post policy missing assignments and/or discharges, post policy forgeries and post policy encroachments.
Missing Assignments or Discharges
If the insured refinances and pays off an earlier mortgage and the discharge was not recorded or one is recorded but an assignment is missing, this would be covered under the policy. Most owners would not know that there is a missing assignment or discharge until sell. At that point they would find out a few days before closing, at best. If they have Owner’s Title Insurance Policy we would cover this issue and undertake the search for the missing documentation.
Post Policy Forgery
The homeowner would be covered if someone forges the owner’s signature to a deed or mortgage in an effort to sell or impose a lien or restriction on his or her home.
Post Policy Encroachment
The Owner’s Title Insurance Policy protects the homeowner, if, after his/her purchase, someone builds a structure which encroaches on their land.
Post Policy Assessment of Municipal Charges
The Owner’s Policy provides coverage for real estate taxes & sewer betterment’s assessed after the date of the policy if they applied prior to the policy. Even if an MLC is ordered and recorded there have been instances where the Towns come back and claim that money is owed. If the homeowner has coverage we will ‘fight the battle’ for them. If not, the homeowner will need to hire an attorney and incur the costs of work that is needed in order to rectify the situation with the Town on their behalf.
The policy issues that the homeowner has actual pedestrian and vehicular access to and from the property.
Building Permit & Zoning Violation
The Owner’s Policy covers a homeowner who is forced to remove or correct existing structures that were built without a permit or that violate an existing zoning law or zoning regulation. This zoning coverage extends to boundary walls and fences.
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.
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.
Increase in Coverage
The one time premium includes an increase in coverage by 10% a year for the first 5 years the policy is in effect.
You Can close
Most of the time the homeowner doesn’t find out there is an issue until a few days before closing. This can prove to be an issue because many sellers schedule back-to-back closings on another piece of property and need to close in order to get the proceeds to purchase the new house. Your closing needs to happen as scheduled. Without Eagle Owner’s Policy this very well may not happen. If the homeowner is insured with an Eagle Owner’s Policy then most often the Title Company will issue a letter to the closing agent to move forward with the closing and will undertake to resolve the issue.
A Lender’s Policy Protects the Lender
NOT the Borrower. Some borrowers are under the mistaken impression that since they have to pay for the lender’s policy it will cover them if there is a title issue. Please understand that the Lender is not going to track down assignments or remove fences and that lender policy coverage often does not arise unless there is a foreclosure.
More Cost Effective
The additional premium for the Owner’s policy is equal to a retainer for a few hours of billable time when an issue surfaces and an attorney has to be hired.