Extended Coverage Explanation
The extended coverage owner's title insurance policy was only available in the past by way of additional endorsements, which could cost nearly $800.00. This coverage can now be obtained for just an additional 15% of the owner's policy premium
Several important risks are 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 just a few 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 record 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.
- 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.
Previously, these types of risks were only covered if they existed on the policy data, although the original Extended Coverage Policy included coverage on a post-policy basis for forgery and encroachments on the land.
Expanded Access - The Extended Coverage 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.
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!
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.
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.
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.