Title Insurance Options for Homeowners

What is title insurance?

Title insurance protects you from legal challenges to your title, or the ownership of your property. It’s different from homeowners insurance, which protects against future property damage that may be caused by an event like a storm or fire. Rather than cover physical damage to your property, title insurance covers matters that affect your ownership rights. For example, a prior owner may still legally own the property, or there may be liens A lien is an interest in property for a debt that is owed. If the debt is not repaid, the creditor can force the sale of the property and apply the money from the sale to the debt. Mortgages, unpaid real estate taxes, and court judgments are examples of liens. or document errors that prevent you from selling your property in the future. To learn more, read What is title insurance and why do I need it?

Can I choose my title insurance company?

You can choose your title insurer, however, in many areas it is common for the seller to pay for the buyer’s title insurance policy. When the seller pays, they will usually choose the insurer. Title insurance companies typically issue the same kinds of policies with similar prices.

What title insurance policies are available for homeowners?

In general, there are two types of title insurance policies available for homeowners. They are the standard owner’s policy, or the 2021 ALTA Owner’s Policy of Title Insurance, and the Eagle policy, also known as the 2021 ALTA Homeowner’s Policy of Title Insurance. There is also an “extended” policy option, which is the standard policy with some of the exceptions Exceptions are matters not covered by the policy. removed, for example, the exceptions for survey issues, The standard policy typically includes an exception for matters that would be shown on a survey such as boundary line issues or encroachments, which are structures that extend past the property line. which often involve boundary disputes between neighbors, and adverse possession, Adverse possession is when someone gains rights to property through use and possession for a certain period of time. For example, if a person fences in a portion of their neighbor’s backyard and uses the land without their permission for the legally required amount of time, they may gain ownership of that property. where someone can gain ownership of land through use.

The Eagle policy provides more coverage than a standard policy. The standard policy covers 10 different matters, called “Covered Risks,” while the Eagle policy covers 33. For example, unlike the standard policy, the Eagle policy covers a deed that is forged after the policy was issued, certain encroachments, An “encroachment” is when a structure extends past the boundary line of the property. For example, your neighbor’s shed may encroach onto your land, or your fence may encroach onto your neighbor’s land. and some zoning, Zoning laws control how property in a particular area can be used. For example, an area may be zoned for residential use only. building permit, Building permits are required for the construction of structures, such as houses. They ensure that buildings comply with laws and safety standards. and subdivision Subdivision laws regulate the splitting of land into smaller lots. For example, a law may require that lots be at least ¼ acre. violations. The Eagle policy also covers rent for a substitute residence if you cannot use your property because of a covered claim. Additionally, to account for rising property values, the amount of insurance The amount of insurance in an owner’s policy is usually the purchase price of the property. in an Eagle policy increases during the first 5 years of ownership.

Eligibility for the Eagle Title Insurance Policy

The Eagle policy is not available in all states and not all properties are eligible for the Eagle policy, which is intended for one-to-four family residences. This means a property that can house up to four families. For example, this would include a house, condo unit, building with four apartment units, and vacation home. The Eagle policy is not available for commercial property, agricultural land (such as a farm), or vacant land (including property that is under construction).

The Eagle policy can only be issued to a natural person (a human being) or an estate planning entity (such as a trust). The Eagle policy cannot be issued to a commercial entity, such as a business. There may be additional requirements depending on the nature or location of your property.

Title Insurance Policy Comparison Chart*

	Eagle Owner’s Policy	Standard Owner’s Policy	Extended Owner’s Policy
Someone else owns your property
Fraud and forgery
Liens A lien is an interest in property for a debt that is owed. If the debt is not repaid, the creditor can force the sale of the property and apply the money from the sale to the debt. Mortgages, unpaid real estate taxes, and court judgments are examples of liens.
Document errors
Missing heirs
Recording “Recording" is the process of placing a document, like a deed, in the public records. Each county has its own system and requirements for recording documents. mistakes
Unknown recorded easements An easement is the right to use part of someone’s property for a particular purpose. For example, neighbors may have easements over each other’s property to use a shared driveway. Utility companies often have easements to run utility lines across private property. A “recorded easement” is one that has been filed against the affected properties in the public records. and covenants A covenant is a condition, restriction, or limitation affecting your title or use of the property. For example, a covenant may limit the type of fence that can be built around your house or prohibit certain kinds of animals from being kept on the property.
Incorrect legal descriptions A legal description is the exact location of property and its boundaries. It’s different from the property address, which is the street name and number assigned by the local government.
Defective court proceedings
Incapacity, “Incapacity” means a person does not have the mental ability to do something. For example, an elderly person with dementia may not have the capacity to sell property. incompetency, “Incompetency” means a person does not have the legal ability to do something. For example, a minor child is unable to sell property. or lack of authority
Condemnation / eminent domain Condemnation, also known as eminent domain, is when the government takes private property for public use. An example is taking a portion of private property to widen a public road.
Legal access to your property
Encroachments An “encroachment” is when a structure extends past the boundary line of the property. For example, your neighbor’s shed may encroach onto your land, or your fence may encroach onto your neighbor’s land.
Adverse possession Adverse possession is when someone gains rights to property through use and possession for a certain period of time. For example, if a person fences in a portion of their neighbor’s backyard and uses the land without their permission for the legally required amount of time, they may gain ownership of that property.
Unrecorded easements An easement is the right to use part of someone’s property for a particular purpose. For example, neighbors may have easements over each other’s property to use a shared driveway. Utility companies often have easements to run utility lines across private property. An “unrecorded easement” is one that has not been filed against the affected properties in the public records.
Forgery after purchase, such as home title theft
Ownership and other rights (leases, easements, An easement is the right to use part of someone’s property for a particular purpose. For example, neighbors may have easements over each other’s property to use a shared driveway. Utility companies often have easements to run utility lines across private property. contracts) created by someone else after your purchase
Covenant A covenant is a condition, restriction, or limitation affecting your title or use of the property. For example, a covenant may limit the type of fence that can be built around your house or prohibit certain kinds of animals from being kept on the property. violations
Subdivision Subdivision laws regulate the splitting of land into smaller lots. For example, a law may require that lots be at least ¼ acre. violations
Building permit Building permits are required for the construction of structures, such as houses. They ensure that buildings comply with laws and safety standards. violations
Zoning Zoning laws control how property in a particular area can be used. For example, an area may be zoned for residential use only. violations
Vehicular and pedestrian access to your property
Property damage caused by use of an easement An easement is the right to use part of someone’s property for a particular purpose. For example, neighbors may have easements over each other’s property to use a shared driveway. Utility companies often have easements to run utility lines across private property. or the extraction of substances For example, an oil company may own the oil underneath a property’s surface and may cause damage to the house or other improvements while drilling for the oil.

*This chart is a simplified summary of things that may be covered. An exception or other provision may affect coverage. For full details, please view your policy document.