In general, there are two basic types of title insurance policies:
Owner’s Policy – Helps protect your rights as the homeowner for as long as you or your heirs own the property. Typically, the seller purchases the owner’s policy for the buyer.
Lender’s Policy – When you get a mortgage loan, your lender will require title insurance. A lender’s policy protects the bank or lending institution for the life of the loan.Either type may be in the form of standard or extended coverage.
Standard or Extended?
Who wants a STANDARD loan policy? Lenders dealing with:
- Bare land
- Temporary financing (new construction)
- Secondary financing
Who wants an EXTENDED loan policy? Lenders dealing with:
- First position loans
- New construction with permanent financing
- Large commercial or multi-family residential projects
Who wants a STANDARD owner’s policy? Purchasers dealing with:
- Bare land
- Single-family residential property
- Small to medium commercial or multi-family projects
Who wants an EXTENDED owner’s policy? Purchasers dealing with:
- Large commercial projects
- Multi-family residential projects
Five General ALTA Exceptions
- Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public record or proceedings by a public agency which may result in taxes or assessments or notices of such proceedings, whether or not shown by the records of such agency or by the public records. (Removed with payment of an extended coverage fee.)
- Any facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. (Removed with an inspection of the property and fully completed ALTA affidavit.)
- Easements, or claims of easement, not showed by the public records, reservations or exceptions in patents or in acts authorizing the issuance thereof, water rights, claims or title to water. (Removed with payment of an extended coverage fee.)
- Any lien or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public records.
- Existing construction* (no work performed within 75 days) removed with fully completed ALTA affidavit.
- New construction* (work performed within 75 days) removed by meeting early issue requirements if the builder is approved, a New Construction ALTA affidavit is fully completed and early issue fees are paid.
- Discrepancies, conflicts in boundary lines, shortage in area, encroachments or any other facts which a correct survey would disclose. (Removed with survey of the property showing location of all improvements in relation to boundaries and any easements or setbacks. In some instances, usually residential property in established subdivisions, we will waive the survey requirement.)
If you have more questions about title insurance policies or your particular transaction, connect with your local AmeriTitle representative.
*Applies to Lender Policies
AmeriTitle has provided this information for the purpose of familiarizing our clients with title insurance policies and common exceptions. Actual coverages and your eligibility may vary by company and state. For exact terms, conditions, exclusions, eligibility and limitations, please contact your local AmeriTitle office. All publications of the American Land Title Association are copyrighted and are reference herein by specific permission from the American Land Title Association (ALTA). http://www.alta.org/