Limited vs. Enhanced: Compare policies
Why select enhanced title insurance over limited title insurance?
A homebuyer may choose between a limited title insurance policy and an enhanced title insurance policy, also known as an "Eagle" policy. While in most cases a limited policy will suffice, the Eagle policy covers a host of "post-policy" issues that a limited policy does not, such as forgery, building permit violations and living trust coverage.
In addition, enhanced coverage protects you from pre-purchase problems such as a deck addition that was erected without a proper building permit. It will also allow you to pass your home down to your heirs without purchasing a new owner's title policy.
Should a title claim arise down the road, an Eagle policy allows for reimbursement of up to 150% (10% annual increase for first five years of coverage) of the original coverage amount. For example, if you bought your home for $100,000, you could be reimbursed up to $150,000 for a claim on title.
To help you determine what policy best fits your needs, read on for a comparison of title insurance coverage for a residential owner's title insurance policy.
An Eagle policy costs 20% more than a limited policy, and rates vary by state. However, enhanced coverage isn't for everybody. Review the chart below to understand the differences between limited and enhanced coverage, and contact us if you have questions.
|A third party claims interest in title||X||X|
|Improperly executed document||X||X|
|Pre-policy forgery, fraud or duress||X||X|
|Defective recording of documents||X||X|
|Undisclosed restrictive covenants||X||X|
|A lien on your title because:
a. a security deed
b. judgement, tax, special assessment or
c. a charge by a home owner's association
|Forced removal of structure because:
a. it encroaches onto another property or an easement
b. it violates an existing zoning law*
c. of violations of a restriction in Schedule B
|Land cannot be used for a Single Family Dwelling
(SFD) because use violates a restriction in Schedule B
or a zoning ordinance.
|Pays rent for substitute land or facilities||X|
|Rights under unrecorded leases||X|
|Building permit violations*||X|
|Compliance with Subdivision Map Act, if any*||X|
|Restrictive covenant violations||X|
|Covenant violation resulting in reversion||X|
|Violations of building setbacks||X|
|Access - Enhanced vehicular and pedestrian access||X|
|Map, if any, not consistent with legal description||X|
|Post-policy damage from minerals or water extraction||X|
|Post-policy living Trust Coverage for Trustee||X|
|Post-policy living Trust Coverage for Beneficiary||X|
|Post-policy automatic increase in value up to 150%||X|
|Post-policy adverse possession||X|
|Post-policy cloud on title||X|
|Post-policy prescriptive easement||X|
|Boundary walls and fence encroachment*||X|
|Insurance coverage forever||X|
* Subject to a deductible and maximum indemnity liability, which may be less than the policy amount. Note: You may change your type of coverage anytime prior to closing.