When purchasing property, title insurance is essential to guard against risks that could impact ownership. Offered by leading companies like First American Title Insurance and Fidelity National Title Co, title insurance endorsements provide specific protections beyond the standard policy, addressing unique needs of buyers and lenders.
What Are Title Insurance Endorsements?
Title insurance endorsements are add-ons to a base policy that provide coverage for specific risks, such as zoning issues, access rights, or boundary disputes. These endorsements can be added to either the lender’s title insurance or the owner’s title insurance. They typically come with a small additional cost, providing targeted protection that gives buyers and lenders peace of mind.
Why Endorsements Matter
For homebuyers, endorsements protect against risks not covered by a basic policy, like issues with easements or zoning compliance. For lenders, endorsements are crucial to securing their interests. Lender’s title insurance cost may increase slightly with these endorsements, but these additions ensure that the property remains a viable asset, providing coverage over things that can surface after a policy has been issued.
Common Types of Title Insurance Endorsements
- ALTA 9 Endorsement: This endorsement series protects against violations of covenants, conditions, and restrictions, such as private land-use rules. It’s essential for properties in subdivisions where such rules apply.
- Access and Entry Endorsements: Ensure the property has legal access via a public road. This is critical for rural or undeveloped properties where access may be a question.
- Zoning Endorsements: These provide coverage if the property does not comply with local zoning laws, which can be essential for both residential and commercial properties.
- Survey Endorsements: Added for both residential and commercial, this endorsements can cover encroachments or boundary disputes that a survey might reveal.
- Condominium/Planned United Development (PUD) Endorsements: these are useful when purchasing a condo or a PUD. They protect against risks associated with homeowner’s associations and common areas.
- Environmental Protection Liens. Provides coverage in case of environmental clean-up liens that may impact the property.
- Multiple Indebtedness Mortgage Endorsement. This endorsement is specific to Louisiana transactions. This endorsement can be added to a lender’s policy and ensures that the mortgage filed by the lender is valid multiple indebtedness mortgage which can secure future indebtedness that may be incurred by the borrower.
Obtaining and Cost of Endorsements
To add endorsements, buyers and lenders can reach out to our office for a list of available endorsements. Some endorsements require additional documentation and underwriting, such as a zoning report and/or survey. Endorsement costs vary but generally represent a small increase in the overall title insurance price. Weighing the added protection against this cost can prevent expensive legal issues down the line.
Making Informed Choices
Title insurance endorsements are a smart way for buyers and lenders to protect their investment. Consulting experienced companies is essential for choosing the right endorsements. These tailored protections help safeguard against unexpected title issues, ensuring peace of mind in real estate transactions.