Title Policy 101
Why we encourage you to obtain "shortages in area" title insurance.
When we prepare your purchase contract, we suggest that you check yes on section 6A. 8 of the contract. This will protect you for what they call "shortages in area". This policy is not mandatory and the cost of it is negotiable.
AMENDMENT OF EXCEPTION TO AREA & BOUNDARIES*
Your standard Residential Owner’s Policy will contain the following exception to coverage: “Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.”
If you purchase this enhanced coverage, that means the paragraph above will be amended to read: “Shortages in area.” You will be insured for loss, costs, and attorney’s fees and expenses resulting from discrepancies, conflicts in boundary lines, encroachment, protrusions, or overlapping of improvements not shown on your survey and not known at the time of closing.
RESTRICTIONS, ENCROACHMENTS, MINERALS ENDORSEMENT (T-19.1)*
If you purchase this enhanced coverage, the T-19.1 endorsement will be attached to, and become part of, your Residential Owner’s Policy. Amongst other covered matters, and unless otherwise deleted, the T-19.1 endorsement provides additional coverage for
Restrictions: Unknown violations of enforceable restrictive covenants existing as of the date of your Residential Owner’s Policy.
Encroachments: Encroachments of your improvements onto neighboring land or your neighbor’s improvements encroaching onto your land which are not shown on your survey.
Minerals: Certain damages to the surface of your land resulting from the extraction or development of minerals.
HOW MUCH DOES IT COST?
The Amendment of Exception to Area & Boundaries is 5% of your basic title insurance premium, but not less than $50.
The Restrictions, Encroachments and Minerals Endorsement (T-19.1) is 10% of your basic title insurance premium if purchased alone, but not less than $50.
If BOTH coverages are purchased, then the cost of the Restrictions, Encroachments and Minerals Endorsement is reduced to only 5% of your basic title insurance premium. That means you receive both coverages for the price of one. Remember, the charges for enhanced coverages are one-time-only fees collected at closing. If purchased, the enhanced coverages last for as long as you or your heirs own your home – whether that is five years or 105 years!