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 Buyers often receive an Owner's Policy of Title Insurance when they purchase real estate, but it is not an automatic part of the closing process. Instead, it is something that is usually negotiated between the Buyer and Seller along with the other terms of the purchase contract.
An Owner's Policy of Title Insurance may take one of two forms- a Standard Policy or a Homeowner's Policy. A Homeowner's Policy provides more insurance coverage than a Standard Policy, but a Homeowner's Policy is only available when an individual purchases land improved with a 1 to 4 family residence. Because a Homeowner's Policy provides more coverage, the insurance premium is slightly higher than the premium for a Standard Policy. Here at Hocking Valley Title Agency, Inc., we issue our Owner's Policies through Old Republic National Title Insurance Company.
 Owner's Policy of Title Insurance
An Owner's Policy of Title Insurance provides the buyer with peace of mind and protection against serious financial loss due to a defect in the title to the property purchased. If a claim adverse to the buyers is asserted, the title insurer, without any expense to the buyer, will defend the buyer against any attack on the title to the property as insured. If the defense is successful and the owner of the real estate sustained no loss, the title company will have no further liability. If, however, the owner suffers an actual loss and such loss was caused by title defects that were not excluded from coverage in the policy, the title company will indemnify the owner against such loss, subject to the terms of the policy.
The Owner's Policy is usually issued in an amount equal to the real estate's purchase price. The premium for the policy is set by the Ohio Department of Insurance and is paid one time, at the real estate closing. The title policy lasts for as long as the buyer has an interest in the property and, in some cases, even after the sale of the property.
Only an Owner's Policy fully protects the buyer should a covered title problem arise with the title that was not listed as an exception during the title search. A title insurance policy will cover both claims arising out of title problems that could have been discovered in the public records, and those so-called "non-record" defects that could not be discovered in the record, even with the most complete search.
Here are thirty-five title troubles that could occur. A buyer may not discover these when he/she first buys real estate – but months or years later, they can result in the loss of the Buyer's property or an expensive lawsuit.
 Homeowner's Policy of Title Insurance
The ALTA Homeowner's Policy is a policy form which provides more coverages than a Standard Owner's Policy, but is only available in connection with the purchase of land improved by a 1 to 4 family residence.
The expanded coverages include the following: (CLICK ONE of the coverages to learn more)
Automatic Coverage Increases
The policy limits will automatically increase by 10% in value each year for the first 5 years up to 150% of the original policy amount. This will help cover increases due to inflation.
Post-Policy Encroachment
The homeowner is covered if, after the purchase, a neighbor builds any structures, other than boundary walls or fences, which encroach onto the homeowner's land.
Building Permit/Zoning Violation
The Policy covers up to a loss of $25,000, after a small deductible, if the homeowner is forced to remove, remodel, or renovate an existing structure built by a previous owner in violation of building permit regulations or zoning laws.
Post-Policy Forgery
The homeowner will be protected should someone cloud the title by forging the homeowner's name to a document such as a deed or mortgage.
Violations of Covenants, Conditions, and Restrictions
Coverage is extended to the homeowner should restrictions affect the ability of the homeowner to secure a loan or sell the property. Also, the homeowner is protected against monetary loss and expenses should someone attempt to enforce restrictions that may be on the property unless the homeowner's conduct resulted in the violation.
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