Basic vs Expanded Title Insurance Coverage

Most buyers are somewhat familiar with title insurance. Just as you have homeowners insurance insures your home and car insurance insures your car, title insurance insures the title of the property. You would not want to buy a home and two weeks later have someone knock at your door and say that they now have an interest in your property.

There are two types of policies, basic coverage and expanded coverage. Both policies cover items such as a mechanics lien. What is a mechanics lien? Let's say the previous owner had the house roofed and did not pay the roofer. The roofer could now file a mechanics lien against your property for the amount still owned on the roof.

What about if there is a "cloud" on the title post policy? In that situation only the expanded title insurance coverage would protect you. Keep in mind that expanded coverage is only available for owner occupied one to four family residential property. The cost is approximately 10% more for the expanded coverage and it is well worth the cost, especially since title insurance is usually split between buyer and seller.

When you write a purchase agreement on a property you would want to specify in the contract that you want the expanded coverage. If you have any questions concerning title insurance it is best to speak with a professional at a title company. They deal with title issues on a day to day basis and can be a tremendous resource when purchasing a home.

Thanks,

David Matney, CRS,GRI,e-Pro

Omaha Real Estate | Search for Omaha Homes for Sale

(402) 490-6771