What is title insurance and how does a land survey expand its coverage?
Title insurance protects the mortgage lender and the property owner (if insured) against claims to the property such as a disputed property boundary line. Most mortgage lenders require the home buyer to purchase a title insurance policy in the lender’s name. This is called a Lender’s policy. Title insurance policies do not provide coverage for encroachments, easements and boundary line disputes which would be disclosed by a current certified survey. This is known as the Survey Exception. Mortgage lenders routinely require a Survey Endorsement to their loan policies which limits the scope of the Survey Exception to the specific problems disclosed by the survey. In other words, a Survey Endorsement provides coverage against possible undiscovered problems involving encroachments, easements and boundary line disputes. To protect yourselves as home buyers you should insist on an Owner’s Policy with a Survey Endorsement based on a professionally prepared current land survey.
