When buying a home, you’ll hear about many types of insurance. One important type is title insurance, and within that, there’s something special called owner’s extended coverage.
Owners’ extended coverage is kind of extra coverage with title insurance.
Think of title insurance like other types of insurance you know well. Just as your car or health insurance has certain rules about what they will and won’t cover, title insurance works the same way. These rules are called exceptions.
Understanding Insurance Exceptions
Let’s look at a simple example. With car insurance, there might be some situations they won’t cover. For instance, if you get into an accident with a family member driving another car, that might not be covered. This is what we call an exception to the policy.
Title insurance follows this same basic idea. It has its own set of exceptions that spell out what is and isn’t covered under your policy. Understanding these exceptions is key to knowing how your coverage works.
Benefits and Importance of Extended Coverage
Owner’s extended coverage offers vital protection beyond standard title insurance. Let’s explore why this extra layer of protection matters so much.
The extra coverage that it provides is really necessary.
Better Protection Through Fewer Exceptions
When you get owner’s extended coverage, it removes some of the exceptions found in basic title insurance. This means you get more protection for your property. Think of it as filling in gaps that regular title insurance might leave open.
Affordable Peace of Mind
One of the best things about owner’s extended coverage is its cost. While it does add a small fee to your title insurance, the price is quite reasonable. The extra protection you get makes it well worth the modest investment.
Making the Smart Choice
If you’re reviewing a contract that gives you the choice between having owner’s extended coverage or not, the decision is clear – you should choose to have it. The additional protection it provides is valuable for any property owner.
Why It Matters
This enhanced coverage helps protect your investment by reducing the number of exceptions in your policy. When fewer things are excluded from coverage, you have stronger protection for your property rights.
Remember, while the cost is small, the benefits are significant. It’s a smart addition to your property protection plan that can save you from potential issues down the road.
Specific Protections Under Extended Coverage
Let’s look at the key protections you get with owner’s extended coverage. This special type of title insurance includes important safeguards that aren’t part of standard policies.
With owner’s extended coverage, it’s actually included in the policy.
Protection for Boundary Issues
One of the most valuable features is coverage for boundary disputes. If someone claims part of your property is actually theirs, your extended coverage helps protect you. This can save you from costly legal battles over property lines.
Coverage Against Possession Claims
Sometimes, people might claim they have a right to use or live on your property. Extended coverage helps protect you from these possession claims. This is especially helpful if someone was using the property before you bought it.
Protection from Mechanics Liens
A mechanics lien can happen when someone who worked on the property claims they weren’t paid. Extended coverage includes protection against these liens, which regular policies often don’t cover.
How It’s Different from Standard Coverage
While standard title insurance leaves out many of these protections, extended coverage includes them automatically. This means fewer exceptions and more complete protection for your property investment.
These extra protections make owner’s extended coverage a valuable tool for protecting your property rights. Instead of worrying about these common issues, you can feel secure knowing you’re covered.