New Title Insurance Policy Consumers Can Relate To

December 14, 2001

WASHINGTON, -- A new title insurance policy, developed by the American Land Title Association (ALTA), will provide consumers with coverage for even more title problems than before. Most lenders require home buyers to purchase lender's title insurance, which only protects the lender's investment in the property. However, it is owner's title insurance, purchased for a one-time fee at closing, that protects the consumer. The new ALTA Homeowner's Policy provides additional coverage for consumers.

Historically, title insurance policies have only covered losses arising from defects in title existing at the time the policy is issued. The new Homeowner's Policy still provides this coverage, and also provides the homeowner with additional new coverage for certain existing problems, as well as some future events affecting their title, which they have not caused or created and have no way to protect against.

Some of the problems covered by the new Policy include:

  • Building permit violations of previous owners. Neighbors building encroaching structures onto your land after you purchase it. Post-policy forgery or impersonation leaving you with no record title Lack of actual physical access for both vehicles and pedestrians to and from your home. Subdivision law violations of the previous owner.

One of the great benefits of the new Homeowner's Policy relates to estate planning. Previously, if you purchased a policy when you bought your home and subsequently placed the title in your trust for estate planning purposes, you may have lost your title insurance coverage. Not so with ALTA's new Homeowner's Policy.

For more information on the new Homeowner's Policy and the additional coverages, talk to your local title company. For information on title insurance, visit the ALTA Web site at http://www.alta.org .

The American Land Title Association represents title insurance companies and their agencies nationwide on a variety of industry and legislative issues. Members of the Association search and insure land titles to protect real estate investors including home buyers and mortgage lenders.

SOURCE: American Land Title Association