Title Basics > Policy Types and Coverage
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Title Insurance Policy Types and Coverage Options

 

There are several different types of title policies, offering a variety of coverage options. Some states, such as Texas, use their own title policies. Below is a brief description of several policies commonly in use throughout the states.

ALTA Lender’s Policy

The ALTA Lender’s Policy provides extended coverage for institutional lenders only, such as banks, savings and loans, federally insured loans and insurance companies. The Lender’s Policy insures the priority and enforceability of the lien of the deed of trust.
It covers losses by covered record matters as well as some non-record matters such as:
 
  •  Encroachments
  •  Unrecorded easements
  •  Access
  •  Loss of priority
  •  Unrecorded liens and encumbrances

Coverage is quite broad under the Lender’s Policy and is available for most types of property. Often, an inspection or a survey is required to issue this type of policy.
 

ALTA Residential Owner’s Policy

The ALTA Residential Title Insurance Policy is an Owner’s Policy, insuring owners of a 1-4 family residential lot or condominium unit. It is drafted in easy-to-read language. This policy, in addition to the basic coverage provided by most title insurance policies, protects the insured against losses caused by:
 
  •  Mechanic’s liens (labor and material liens) arising out of work done on the property which the insured did not agree    or agree to pay for
  •  Major encroachments: The insured is protected against forced removal of an existing structure (other than a    boundary wall or fence) because it extends onto adjoining land or onto an easement
  •  Unrecorded interests arising from off record leases, contract or options
  •  Zoning violations
  •  Violations of recorded covenants, conditions and restrictions.
 

CLTA/ALTA Homeowner’s Policy of Title Insurance

Requires a 10 - 20 percent additional premium
 
The CLTA/ALTA Homeowner’s Policy of Title Insurance offers additional coverage as compared to the ALTA Residential Title Insurance Policy, including:
 
  •  Post policy
    •  Forgery
    •  Encroachments
    •  Extraction of minerals or water
    •  Living trust coverage
  •  Enhanced marketability
  •  Building setback violations
  •  Discriminatory covenants
  •  Insurance coverage forever
  •  Violations of subdivision laws or regulations*
  •  Building permit violations
  •  Zoning law violations
  •  Encroachment of improvements onto adjoining land*
  •  Enhanced access
  •  Damage to structure from extraction of minerals
  •  Enhanced marketability
  •  Reversion coverage for covenant violations
  •  Increase in policy amount by ten percent (10%) each year for the first five years 
 
*These coverages are subject to a deductable and maximum indemnity liability, which may be less than the policy amount.
 
The policy DOES NOT COVER, among other things, the following:
 
  •  Matters which a correct survey would show
  •  Unrecorded matters
  •  Matters which a physical inspection of the property would disclose
  •  Rights of parties in possession
  •  Unpatented water and mineral rights
  •  Matters known, created or assumed by the insured
 

ALTA Owner’s Policy

(Extended Coverage)
Do not confuse this with an ALTA Residential Owner’s Policy. This is a broad form of insurance given in California.
 
This policy requires an ALTA survey to be provided to the title company. In addition to the coverage given by a CLTA policy, it covers losses by:
 
  •  Encroachments (not disclosed in the policy)
  •  Lack of access
  •  Rights of parties in possession
  •  Unrecorded liens and encumbrances
  •  Taxes
  •  Matters which a correct survey would show
 
NOTE: This policy does not cover matters created or assumed by our insured, which is true for all policies.
 
When this type of coverage is requested, we may require:
  •  An ALTA Survey ($3,000 - $7,000 cost)
  •  A field inspection (usually done by the company)
  •  A check with all utilities to make sure they have no unrecorded easements
  •  Copies of all leases and/or tenant lists
 
Since these requirements take time to complete, plan ahead. Further, we will show as exceptions in the policy all matters we find, so there may be an amended preliminary report issued after the inspection reflecting additional exceptions.
 
NOTE: Some coverages may not be available in your area, due to legal, regulatory, underwriting requirements or other restrictions. This checklist provides a brief summary and highlights of the various policies. Reference is made to the full policy for all of the provisions, including exclusions and conditions. Please contact your North American Title Representative for information.
 
Some states offer additional policies. Please contact your local North American Title office for more information.