Chicago Title Insurance Company

Transcription

1 Chicago Title Insurance Company THE CHICAGO ENHANCED HOMEOWNER S POLICY UNDERWRITING REQUIREMENTS AT A GLANCE The Property must: Be a One-to Four residential homeplace Be Improved Be Platted or contain less than 25 acres Other Requirements: A usual and customary search is required The owner must be a natural person or their trustee Schedule A of the commitment, if one is issued, must state that the policy to be issued is ALTA Homeowner's Policy of Title Insurance (10/17/98). Survey coverage for certain Covered Risks without a survey Seller s affidavit should be executed at closing Premium The premium charged shall be the full, reissue, refinance or other rate normally applicable for this coverage amount plus an additional premium for the enhanced coverage in the amount of 20% of the full rate for this total coverage amount. Example: Owner's policy liability amount: $150, $ standard Owner s policy premium x 120% $ Chicago Enhanced policy premium For more information, please contact your local Chicago Title office.

2 Chicago Enhanced Policy Highlights Value-Added Protection Traditional title policies don t increase their coverage as the value of a house increases. Not so with the Chicago Enhanced Policy. The policy amount automatically increases by 10 percent per year for five years up to 150 percent of the original policy limit. This automatic increase in coverage is at no extra cost. Pre- and Post-Policy Protections In today s real estate market, homeowners can take nothing for granted. Chicago Title protects against many unknown elements by offering both pre and post policy coverage against most forgeries, liens for unpaid materials and labor not authorized by you, as well as building encroachment issues other than boundary walls or fences. Expanded Access Coverage This policy expands the right of access coverage to include the existence of actual pedestrian and vehicular access over adequate streets or roads your ability to get to or from your land on foot or vehicle. Restrictive Covenant Violations The Chicago Enhanced policy protects homeowners against the loss of title to property because of a violation of a restrictive covenant that occurred before the insured acquired title. Building Permit Violations With so many different city and town zoning and permit laws, it s hard to keep track. But a homeowner shouldn t have to pay for someone else s oversight. The Chicago Enhanced policy protects against certain losses incurred because no legal building permit was obtained for the existing residence. This coverage is subject to deductible amounts and maximums of liability. Encroachments The Chicago Enhanced policy provides coverage if the homeowner is forced to remove structures which are located on the property when the policy is issued, because the improvements encroach onto a neighbor s property. If the encroachment is a boundary wall or fence this coverage is subject to deductible amounts and maximums of liability. Protection is also afforded in the event that, after the policy is issued, a neighbor builds a structure other than a boundary wall or fence, which encroaches on the insured property. Easements This policy protects the homeowner against loss if they are required to remove existing structures because they encroach into an easement or over a building set-back line. In addition, damage to existing structures caused by the use or maintenance of any easement will be covered by this policy. Subdivision Law Violations The Chicago Enhanced policy protects homeowners from loss if they can t sell the property or get a building permit because of a violation of a subdivision law that existed on the date of purchase. This coverage is subject to a policy deductible and a maximum limit of liability. Zoning Law Violations The Chicago Enhanced policy provides coverage if the land purchased is not properly zoned to permit one-to-four family residential homes or condominiums. Water and Mineral Rights Damage The Chicago Enhanced policy provides coverage if a homeowner s existing house is damaged because someone exercises a right to use the surface of the land for the extraction of or development of minerals. Additional Insureds The definition of an insured has been expanded to include: 1. Anyone who inherits the title from the insured; 2. A spouse who is awarded title in a divorce; 3. The trustee of a trust to whom the Insured conveys the title after the policy is issued; 4. The beneficiaries of the trust after the death of the insured. Supplemental Taxes Homeowners are wary of real estate tax surprises. In the event that a hidden real estate tax affects your title, this policy protects homeowners from unforeseen costs, including prior year s taxes not previously assessed because of construction or a change of ownership or use that occurred before the policy was issued.

3 Chicago Title Insurance Company Compare the Coverage Coverage Residential Owner's Policies Standard Policy** Chicago Enhanced Policy*** 1. Someone else owns an interest in your title 2. Someone else has an easement on your land 3. Improperly executed, delivered or recorded documents 4. Forgery, fraud, duress, incompetence, incapacity or impersonation 5. Defective recording of document 6. Restrictive covenants limiting use of land 7. A lien on your title because of a deed of trust, judgment, tax lien, special assessment or homeowners association charge 8. Unmarketable title 9. Mechanics' liens 10. Plain language 11. Coverage continues indefinitely 12. Rights under leases, contracts or options 13. Inability to use land for single-family dwelling because of a violation of a zoning ordinance 14. Pays rental costs for a substitue residence 15. Discrimnatory covenants 16. Forced correction or removal of any structures due to restrictive covenant violations 17. Unrecorded easements 18. Supplemental taxes 19. Survey coverage without a survey for certain Covered Risks 20. Reversion or forfeiture of title due to restrictive covenant violations 21. Actual vehicular and pedestrian access based on legal right 22. Damage to existing improvements, including landscaping, due to exercise of existing mineral rights. 23. Pays costs to relocate personal property and damage to personal property during move 24. Damage to existing structures due to maintenance or use of any easement affecting your property* 25. Subdivision law violations of previous owner* 26. Forced removal of any structure that violates an existing zoning law* 27. Enhanced marketability coverage (including subdivision law violation*) 28. Failure to obtain building permit by previous owner* 29. Forced removal of any structure including boundary walls and fences which encroaches onto your neighbors property, onto an easement or over a building setback line* 30. Post Policy inflation coverage up to 150% of the original policy 31. Post Policy coverage for adverse possession 32. Post Policy coverage for prescriptive easement(s) 33. Post Policy coverage for forgery or impersonation 34. Post Policy coverage extends to Living Trust beneficiaries and trustees 35. Post Policy coverage for defective title 36. Post Policy coverage for a neighbor's encroachment, other than boundary wall or fence, onto your property

4 Chicago Title Insurance Company *Subject to a deductible and maximum indemnity liability, which may be less than the policy amount. **Standard Policy is a reference to ALTA Residential Title Insurance Policy (6-1-87). ***Chicago Enhanced Policy is a reference to ALTA Homeowner's Policy of Title Insurance ( ). NOTE: Chicago Title also provides enhanced coverage for lenders through the ALTA Expanded Coverage Residential Loan Policy ( ). CHICAGO ENHANCED POLICY FREQUENTLY ASKED QUESTIONS Q: What is it? A: A new type of title insurance policy which provides several additional coverages to a residential homeowner. Q: What are the additional coverages? A: Chicago Enhanced offers substantial additional coverages. The highlights include: A. Post Policy Coverage provides coverage for certain matters, such as forgeries, liens for unpaid materials and labor not authorized by the homeowner, and encroachments of neighbor s structures other than boundary walls or fences - onto the homeowner s property, which occur after the effective date of the policy. B. Expanded Access Coverage right of access is expanded to include actual pedestrian and vehicular access. C. Restrictive Covenants Violations protects against loss of title because of a violation of a restrictive covenant that occurred before the insured acquired title. D. Building Permit Violations protects against certain losses incurred because no legal building permit was obtained for the existing residence. * E. Encroachments provides coverage if the homeowner is forced to remove existing structures which are located on the property at the time the policy is issued, because the structures encroach onto a neighbor s property. * In addition, provides protection in the event a neighbor builds a structure other than a boundary wall or fence which encroaches on the insured property after the policy is issued. F. Easements provides coverage if the homeowner is required to remove existing structures because they encroach into an easement or over a building setback line. In addition, protection is provided against damage to existing structures caused by the use or maintenance of any easement. G. Subdivision Law Violations provides coverage if the homeowner cannot sell the property or obtain a building permit because of a violation of a subdivision law that existed at the date of purchase. * H. Zoning Law Violations provides coverage if the land purchased is not properly zoned to permit one-to-four family residential homes or condominiums. * I. Water and Mineral Rights Damage provides coverage if the homeowner s existing house or landscaping is damaged because someone exercised a right to use the surface for the extraction of or development of minerals.

5 J. Supplemental Taxes provides coverage against certain unforeseen tax costs, including prior years taxes not previously assessed because of construction or a change of ownership or use that occurred before the policy was issued. K. Value-Added Protection the policy amount automatically increases by 10 percent per year for five years up to 150 percent of the original policy limit. There is no extra charge for the increase. L. Additional Insureds The definition of an insured is expanded to include: 1) Anyone who inherits title from the insured; 2) A spouse who is awarded title in a divorce; 3) The trustee of a trust to whom the insured conveys the title after the policy is issued; and 4) The beneficiaries of the trust after the death of the insured. *The amount of insurance for these covered risks is subject to a deductible amount and maximum dollar limit of liability. See question regarding deductibles and caps on liability, below. Q: Is a survey required for the additional coverages? A: NO, the coverages do not require a current survey. Q: What is the cost? A: The rate of the Chicago Enhanced policy is 120% of the existing published Chicago Title North Carolina rates. Credit for reissues are deducted from the 120% rate. Q: What type of property qualifies? A: The property must be: a. one-to-four family residential homeplace b. Improved property c. Platted or contain less than 25 acres Q: What type of property does not qualify? A: Unimproved land or land containing a partially completed structure of any kind, Commercial property; or Land containing more residential improvements than a one-to-four family residence Q: What are the search and title policy requirements? A: A usual and customary search The owner must be a natural person or owner trustee Schedule A of commitment, if one is issued, must state that the policy to be issued is ALTA Homeowners Policy 10/17/98 No survey is required A normal seller s affidavit (lien waiver) is required Q: What about deductibles and caps on liability? A: The Chicago Enhanced policy contains a unique Schedule A that references the policy type and contains preprinted liability caps and deductibles for certain coverages. These coverages include: a. Subdivision Law Violation: deductible - lesser of 1% of policy amount or $2,500; liability cap - $10,000 b. Building Permit: deductible - lesser of 1% of policy amount or $5,000; liability cap - $25,000 c. Zoning: deductible - lesser of 1% of policy amount or $5,000; liability cap - $25,000 d. Encroachment of Boundary Walls or Fence - deductible - lesser of 1% of policy amount or $2,500; liability cap - $5,000

6 Q: Why should this product be offered to the buyer? A: The Chicago Enhanced policy offers several additional coverages, which protect the homeowner s interest in the property. The increase in premium is minimal when compared to the potential cost of claims, even those claims with favorable results. Q: What about the loan policy? A: The loan policy also offers substantial additional coverages for the lender. In addition, the policy incorporates ALTA endorsements 4, 5, 6, 6.2, 8.1 and 9, if applicable.