Comparison of Coverages: Standard vs. Enhanced Owner’s Title Insurance Policies

Purchasing a home is one of the biggest financial decisions most people will make. With that investment comes an essential form of protection title insurance. While homeowners quickly recognize the need for homeowner’s insurance or mortgage insurance, title insurance is often overlooked or misunderstood. Yet it safeguards the most important part of the real estate transaction your legal ownership of the property.

There are two main types of owner’s title insurance available to homebuyers: the Standard Owner’s Policy and the Enhanced Owner’s Policy. Both protect against title defects, but the level of coverage is not the same. Knowing the difference can help you make an informed decision and protect your equity for as long as you own your home.

What Is Title Insurance?

Title insurance protects homeowners and lenders from financial loss caused by defects in a property’s title. Unlike most insurance policies that cover future risks, title insurance defends against problems that already exist—but may not be discovered until after you buy the property.

A title search is conducted before closing to review public records and confirm legal ownership. However, even with a comprehensive search, certain problems remain hidden fraud, forgery, missing heirs, filing errors, or unpaid liens. This is where title insurance becomes your legal and financial safety net.

If a covered claim arises, your title insurance company will:

• Pay for your legal defense
• Cover financial loss up to the policy amount
• Resolve valid claims to protect your ownership

And the best part? You only pay for it once at closing and it protects you for as long as you own the property, and in many cases, even after you sell.

Who Does Title Insurance Protect?

There are two types of title insurance policies:

1. Lender’s Title Insurance (Required)

• Required by mortgage lenders
• Protects only the lender’s financial interest in the property
• Covers the loan amount—not the homeowner’s equity
• Must be purchased again if you refinance

2. Owner’s Title Insurance (Optional but Strongly Recommended)

• Protects the homeowner, not the lender
• Covers up to the full purchase price (or more with Enhanced policies)
• Defends your ownership rights and equity
• Remains in effect as long as you own the home and after death, for your heirs

Without an Owner’s Policy, a homeowner could face legal battles and financial losses alone.

Standard vs. Enhanced Owner’s Title Insurance

Both policies offer protection, but the Enhanced Owner’s Policy provides broader coverage and increases in value over time. Here's a simplified comparison explained in everyday language without using copied tables.

Standard Owner’s Title Insurance Covers:

These are issues that existed before you bought the property.

• Someone else claims ownership of your property
• Errors in public records or document recording
• Forged deeds, mortgages, or releases recorded before closing
• Signing mistakes or improper notarization in earlier documents
• Unknown heirs or missing signatures from previous owners
• Recorded liens, such as mortgages, HOA dues, judgments, or unpaid taxes
• Restrictive covenants recorded in the past
• Someone else has a recorded easement across your property
• You cannot sell because your title is unmarketable
• Title insurance company pays legal fees and covered claims

This policy is designed to protect against past defects only. It does not protect against future events or property value increases.

Enhanced Owner’s Title Insurance Adds Even More Protection:

Enhanced coverage includes everything in the Standard policy plus protection for future risks and increased home value.

Here’s what Enhanced policies cover that Standard policies do not:

• Post-policy forgery, fraud, or impersonation
• Unknown encroachments or boundary line disputes discovered later
• Forced removal of a structure due to encroachment or zoning violation
• Building without proper permits by a previous owner
• Subdivision or permit violations before you owned the home
• Post-policy liens from unpaid contractor bills (mechanic’s liens)
• Claims of adverse possession or prescriptive easements after purchase
• Loss of access if the property is later discovered to have no legal driveway or road access
• Coverage for easements or agreements that were never recorded
• Enhanced marketability protection, helps you sell the property if title issues arise later
• Coverage extends to living trusts and certain estate transfers
• Automatic increase in coverage up to 150% of the property’s value, recognizing appreciation over time
• Protection continues even after you sell, transfer to heirs, or place the property in a trust

Real Life Examples Where Enhanced Coverage Matters

• Example 1 – Boundary Dispute: You build a fence only to discover years later that part of your backyard is on your neighbor’s lot. Enhanced coverage helps cover legal costs or removal. Standard does not.
• Example 2 – Missing Permits: A previous owner added a sunroom without a permit. The county demands removal. Enhanced policies may cover this. Standard does not.
• Example 3 – Value Increase: You bought for $400,000. Ten years later, the home is worth $600,000 when a title claim arises. Enhanced coverage automatically increases to match equity growth—Standard stays capped at $400,000.

How Much Does It Cost?

The cost of title insurance varies by state, purchase price, and loan amount. However:

• You only pay once—at closing
• There are no monthly premiums
• Standard policies are slightly cheaper
• Enhanced policies typically cost about 10–20% more but offer significantly more protection

For a precise quote, most title companies—including The Title Guy—can provide a personalized title insurance estimate based on your transaction.

Which Policy Should You Choose?

Protect Your Home and Your Future

Your home is more than a transaction, it is your investment, your security, and often your largest asset. Title insurance is one of the simplest and most cost-effective ways to protect it. While both Standard and Enhanced Owner’s Policies offer valuable protection, the Enhanced Policy delivers broader, future-focused coverage and greater peace of mind.

Close with Confidence, Work with The Title Guy

The Title Guy provides clear, transparent title services backed by modern technology and experienced professionals. Whether you're purchasing, refinancing, or investing, we make sure your title is secure, your closing is seamless, and your equity is fully protected.

Ready to protect your home the right way? Contact The Title Guy today.