Not all owner’s title policies are the same. Beyond the standard policy, most insurers offer an enhanced version that covers more for a higher premium. Whether the upgrade is worth it depends on the property. Let me lay out the difference.
Written by Adam L. Engel, Esq., Principal and real estate attorney at Prime Title & Escrow
When you buy an owner’s policy, you often have a choice between a standard policy and an enhanced one. They protect against the same core risks, but the enhanced policy reaches further. Here is what separates them.
A standard owner’s policy covers hidden defects that existed as of your closing. An enhanced owner’s policy, frequently based on the ALTA Homeowner’s policy, adds coverage for certain additional matters, including some that arise after closing, for a higher premium. Both are one time costs paid at closing.
What the standard policy does
A standard owner’s policy is strong protection. It covers the hidden, pre existing defects I describe in what title insurance covers: a forged deed in the chain, an undisclosed heir, an old lien, a recording error. For many buyers it is exactly the right coverage, and it protects your equity for as long as you or your heirs own the home.
What the enhanced policy adds
An enhanced owner’s policy broadens the coverage. Depending on the insurer, it can add protection for certain matters that arise after closing rather than only those existing as of the policy date, along with items such as some forgery, encroachment, or building permit issues, and features like inflation protection that adjusts the coverage amount over time. The specific additions are spelled out in the policy, which is why reading it matters.
The cost difference
Broader coverage costs more. An enhanced owner’s policy typically carries a higher premium than the standard policy, often on the order of an additional twenty percent, though the exact figure depends on the insurer and the property. Because it is still a one time cost, the question is whether the added protection justifies the added premium for your specific home.
The right choice depends on the property. On a home where boundary lines, additions, or permits could raise questions down the road, the enhanced policy’s broader reach can be worth the extra premium. On a straightforward purchase, the standard policy may be all you need. Enhanced policies are generally built for one to four family homes, so they are not available for every property. I review both options against your actual purchase so the decision fits the property, not a default.
How to decide
My approach is simple: I quote both, explain what the enhanced policy adds in your case, and let you weigh the extra coverage against the extra cost. For the broader cost picture, see how much title insurance costs in Virginia and title and settlement fees. Whichever you choose, the point is to make it a real decision.
A concrete case shows the value. Suppose a few years after closing you discover that a neighbor’s fence, or your own addition, crosses a boundary line in a way that predates your purchase. An enhanced policy is more likely to respond to certain matters like that than a standard policy. Whether that risk is worth the added premium depends on the property, which is the whole point of comparing. Like the standard policy, an enhanced owner’s policy is a one time cost, and when it is issued alongside the lender’s policy at closing, the lender’s policy is generally priced at the reduced simultaneous issue rate. So the comparison is really between two one time premiums, not between an upgrade and a recurring bill, and I lay the two quotes side by side so the difference is a number you can see.
Both policy types are available on residential purchases across Virginia and West Virginia, subject to each insurer’s rules. I am glad to compare them for your specific home so you can choose with confidence.
Send me your contract and I will quote the standard and enhanced owner’s policies so you can choose what fits your home.
Get Your Free Quoteor call (703) 552-4155Frequently asked questions
What is the difference between a standard and an enhanced owner’s title policy?
A standard owner’s policy covers hidden defects that existed as of closing. An enhanced owner’s policy, often based on the ALTA Homeowner’s policy, adds coverage for certain matters, including some that arise after closing, for a higher premium.
How much more does an enhanced title policy cost?
An enhanced owner’s policy typically costs more than a standard one, often in the range of an additional twenty percent of the standard premium, though the exact figure depends on the insurer and the property. Ask your title agent for both quotes to compare.
What extra coverage does an enhanced policy provide?
Depending on the insurer, an enhanced policy can add coverage for certain post closing risks such as some forgery, encroachment, or building permit matters, plus features like inflation protection. The specific additions are listed in the policy, so read it carefully.
Is an enhanced owner’s policy worth it?
It depends on the property and your tolerance for risk. The broader coverage can be valuable, especially on a home where boundary or improvement questions are a concern. I review both options with clients so the choice fits the specific property.
Can I get an enhanced policy on any property?
Enhanced owner’s policies are generally designed for one to four family residential properties and may not be available for every property type. Ask your title agent whether an enhanced policy is available for your specific purchase.
This article is general information about standard and enhanced owner’s title policies in Virginia and West Virginia. It is not legal or financial advice for your specific transaction, and coverage and availability depend on the policy and insurer. Please review your policy and confirm the details with me directly.