For every type of insurance that you purchase, there are a variety of different coverages offered. For instance, if you buy homeowner’s insurance you may want to add extra coverage if you have valuable paintings or jewelry that may not be covered by the basic policy amounts.
The same is true for title insurance.
The standard Owner’s Title Insurance Policy affords basic protections against many title defects such as fraud, forgery, or matters in the public record. For example, the policy includes coverage for recorded liens, real property taxes, or legal documents within the transaction that were executed under an invalid or expired power of attorney.
The title agent’s intent is to research thoroughly the ownership rights of the property, as well as any judgments or liens that may exist that could affect your rights to the property. Then the agent clears or cures those issues to ensure that you have free and clear title to the property when you purchase it.
Although your title agent is diligent in searching out the facts about your property that are in the public record, not everything about your property is “of record.” Therefore, a standard title policy includes exceptions to coverage for certain matters that may be undiscoverable.
An Enhanced Owner’s Policy adds 22 new covered risks that are excepted in the standard policy. The enhanced policy is typically available to purchasers of an owner-occupied one-to-four family residence wherein each insured is a “Natural Person.” The term “Natural Person” is defined under the conditions of the title policy. With the enhanced policy, the policy insures against certain future activities and matters that would not be discoverable by the title agent’s search of the land records.
Coverage under an enhanced policy continues to be subject to the title policy’s conditions, exclusions and exceptions unless it is stated differently in the covered risk itself.
Let’s take a look at the additional coverage offered with an Enhanced Owner’s Policy.
Inflation Coverage
One of the most important benefits of an Enhanced Owner’s Policy is inflation coverage. The amount of insurance automatically increases by 10% of the policy amount each year for the first five years, up to 150% of the amount insured for your home. This occurs, without payment of any additional premium, to cover increases in the value of the insured property.
Building Permit Violation
When you purchase a home, you may not be aware that the former owner failed to obtain a legal permit from the proper government office to put in a swimming pool, add a wing to the house or construct an additional dwelling unit (ADU).
An enhanced policy protects you if you are forced to remove or remedy your existing home, or any part of it (other than boundary walls or fences) because any portion was built by a previous owner without obtaining a building permit. This coverage is subject to a deductible amount and a maximum dollar limit of liability, as shown in Schedule A of the title policy.
Covenants, Conditions and Restrictions
Covenants, Conditions & Restrictions (CC&Rs) list the rights and obligations of a homeowners’ association (HOA). This could include your maintenance obligations, property-use restrictions, assessments and insurance obligations, among others.
Without your knowledge, these CC&Rs may have been violated prior to your ownership, resulting in a financial obligation to the HOA or loss of title. An enhanced policy covers you if you are forced to correct or remedy the existing violation or if the title is lost or taken because of any covenant, condition or restriction, which occurred before you acquired your title, even if the covenant, condition or restriction is excepted in the policy.
Encroachment
If any structures on your new property are encroaching onto your neighbor’s property, for instance if the garage is built partially on the neighboring property, the enhanced policy provides coverage in the event you are forced to remove those structures due to the encroachment. If the encroaching structures are boundary walls or fences, this coverage is subject to a deductible amount and a maximum dollar limit of liability, as shown in Schedule A of the policy.
In addition, the policy provides coverage in the event your neighbor builds any structures, after the policy date, that encroaches onto your land (other than boundary walls and fences).
Enhanced Access
An enhanced policy insures you have actual pedestrian and vehicular access to your property.
Map and Address Inconsistencies
If a map is attached to your policy, the enhanced policy provides coverage if the map does not show the correct location of the land, according to the public records.
Taxes
Sometimes a taxing authority may assess supplemental real estate taxes not previously assessed against the land but covering a period prior to your purchase. This could be due to new construction or a change of ownership that occurred before the policy date. An enhanced policy would cover this liability as well.
Zoning
If a previous owner added structures to the property that violate zoning laws, an enhanced policy provides coverage to you if you are forced to remove or remedy your existing structures, or any part of them, due to those violations. If you are required to remedy existing structures, the amount of insurance is subject to a deductible amount and maximum dollar limit of liability, as shown in Schedule A of the title policy.
In addition, you are insured if it is determined your property cannot be used as a single-family residence because it violates existing zoning laws or zoning regulations.
Final Word
Property ownership is often more complicated than we know, especially if you are purchasing property in an unusual situation, where property has been recently subdivided or where there has been recent construction. If you have any questions or concerns, it may be advisable to enlist the help of a real estate attorney to review all aspects of your purchase. We also invite you to contact a local title insurance agent to learn how the Enhanced Owner’s Title Policy can provide you additional protection for your homeownership rights.
One agency owner underwritten by Alliant National recounts his long, successful career in the title insurance field.
Rob Skidmore knows his way around title insurance. The owner of several agencies underwritten by Alliant National, he and his employees serve aspiring homeowners in Medina and northeastern Ohio and are driven to help home buyers achieve their dreams.
His journey in the title insurance field offers a fascinating portrait of a professional life well lived, as well as how the industry has changed over more than three decades.
Title insurance is a multi-generational endeavor for the Skidmore family. His father started Transfer Title in 1967, with Rob joining the business in 1985. He eventually took over the company with his brother. They gradually expanded the business, forming the joint venture company Transfer Title Connection in 2004 and acquiring Ohio Fidelity in 2018.
There were other factors behind Rob’s initial interest in title insurance, such as his passion for technology and computers.
“When I was in college, I had this class that required a spreadsheet. I created a settlement statement with macros that could compute settlement costs,” said Rob. “After graduation, I used it in business for maybe six or seven years before we updated to a new system.”
His interest in technology trends has continued to benefit Rob and his businesses, prompting him to be an early adopter of new technologies to increase efficiencies, improve customer experiences and grow profits. One such decision involved implementing RamQuest software early on, which made them only the second title company to do so in Ohio at the time.
“I love the technology – the experience of building out our IT department, purchasing our own server and so on,” said Rob. “My interest has pushed me to be an early adopter, which has benefited our employees and customers.”
Another factor that has influenced many of his decisions as a company owner was his background as a business major with a marketing concentration. Rob was immediately attracted to the prospect of overhauling his agencies’ brands.
“I quickly started working on our slogan, which ultimately led to a name change,” said Rob. “We also decided to do a major overhaul of the logo, which involved an internal focus group.”
Over the years, Rob has found his title career to be quite rewarding, especially the way it has benefited his community.
When asked if there is a central passion behind his work, Rob is unequivocal. “Absolutely. Our motto is ‘Insuring Reality, Conveying Dreams.’ People outside the industry don’t get that when you’re issuing title policy, handling escrows and doing closings, it’s a joyous occasion. Take a young couple who has the dream of starting a family. Or consider someone who is looking to downsize. It was their dream, and they are passing it along to the next family. In both cases, it’s an extraordinary thing.”
Another way Rob has been able to better his community is through charitable giving. As a long-time member of the local business networking group, Transfer Title annually sponsors families at Christmas and makes a variety of donations to local charities. In addition, the company is a supporter of the Mary Grace Foundation, sponsoring its 5K run each year and encouraging employees to run or participate. The money raised during the event goes to families impacted by breast cancer.
Transfer Title’s commitment to enriching the heart of the Medina community is perhaps best embodied in its support of Mainstreet Medina. A non-profit organization, Mainstreet Medina supports efforts related to the historic preservation, economic sustainability, and continued evolution of Medina’s Historic District as the community’s vibrant center. Transfer Title not only routinely sponsors Mainstreet Medina’s initiatives and events, but it has conducted title work for real estate revitalization efforts undertaken recently by the Recovery Center of Medina, which included pro bono legal work by Rob.
Rob has impacted Medina not only through his company, but also by serving on various community, business and industry associations. He is an active participant in the Ohio Land Title Association (OLTA) and has previously served as the President of the Medina City School Board, the Medina County Career Center, the Medina County Bar Association and the Salvation Army board.
In addition to witnessing the positive effects his businesses have had on the community, Rob’s long history in the field has given him a front row seat to the evolution of the title industry.
“The title industry has changed a lot, and I have seen different eras come and go,” said Rob. “Recently, it has been a very profitable era, which is positive in many ways. However, there is increasingly a focus on speed, with everything being go, go, go. Less emphasis is being placed on expertise and working diligently through a process. Marketing and newer communication mediums like social media are taking more precedence. Now, both are important. Very important. But expertise and doing good work will always trump everything else.”
As Rob sees it, prioritizing expertise matters, particularly when it is not always clear to the customer how the title insurance process works and why it is a critical component of the closing process.
“Sometimes during closings, questions will come up of how the company got involved. It’s important to properly educate the customers and remind them that we are here to insure their title,” Rob explained. “We act, essentially, as a guarantee on their claim of ownership. With a one-time premium, they are protected for life. As a third party, you need the expertise to work on behalf of the owner, buyer and lender. Simply put, it’s a very important function. We need to follow the directions of all parties, not to mention look at and assess all relevant risks.”
Rob emphasized that to succeed in the field requires building a team with the requisite expertise. But that is not all. Those working in title insurance must also be equipped to contend with the emotional intensity that can be a part of the closing process.
“Without a doubt, attracting and retaining top talent is one of the biggest challenges I face as a business owner, and we’ve been lucky to have some of the best staff in the business,” said Rob. “Employees need to know their field but also deal with the stress of closing on a property.”
Considering the complexity of real estate transactions, title insurance professionals must be comfortable expecting the unexpected.
“Quite often, things happen or there are forces at work beyond anyone’s control,” he said. “Thankfully, advances like ‘clear to close’ have changed the game and streamlined it. Technology helps.”
As with anything, though, technology is not without its downsides, as cyber threats like real estate wire fraud have exploded in recent years. Such developments once again underscore the need for high-quality IT systems and experienced professionals who can safely guide consumers through the process.
“You’re only as good as your weakest technological link in the transaction,” Rob cautions. “Cybercrime is a huge problem in this field. Title agents must communicate effectively with customers about all pertinent risks. We have spent a lot of time and resources implementing preventative measures like encryption. But sometimes, old school methods like snail mail are still the best approach.”
Another piece of the puzzle is finding trustworthy underwriters with whom to build effective and mutually beneficial partnerships. In Rob’s case, one such underwriter is Alliant National.
He is particularly appreciative of Alliant National’s great technological systems. In addition, he noted that the underwriting relationship is often a key factor in determining what properties can ultimately be closed. He explained that not all underwriters are the same in how they approach deals or navigate risks.
“There can often be potential defects in the chain of title,” said Rob. “Some underwriters may not like that. But with Alliant National, I have a lot of confidence in their management, technology and, of course, people in navigating those issues.”
After more than three decades in title insurance, few people are more well-versed in the field or capable of commenting on its evolution than Rob Skidmore. Through building out his businesses, he has achieved a great deal of both personal and professional satisfaction and shared the fruits of his efforts with his surrounding community. He has also continuously prioritized what has always been essential to a good and lasting business: focusing on people, creating relationships and establishing hard-won expertise. These are the principles that animate him. They are also what he seeks to impart to those who may come after him.
“Whenever you’re faced with making a customer happy or doing the right thing, always do the right thing, even if you lose some business because of it,” he said. “Business always comes back in other ways. There is an old saying about how it takes a lifetime to build a reputation but a second to lose it. I couldn’t agree more. In title insurance, you may find yourself faced with such decisions. Always, always, always, do things the right way.”
Alliant National Agent finds work-arounds amid COVID-19
It feels almost impossible to stay connected right now. Though we’re starting to see stay-at-home orders lift across the country, social distancing protocols remain. As we continue to be separated from each other, title agents are finding innovative ways to make sure their clients and employees are safe and feel valued. Cindy Koebele, owner of Minnesota-based TitleSmart Inc., recently joined us on a webinar about doing just that.
When her home state started to close in response to COVID-19, Cindy’s first focus was to see who could work from home and make sure those team members had the tools to do so. Cindy and company also started scheduling smaller appointments to ensure client safety.
Cindy’s team also faced the same roadblocks everyone has experienced over the past several months – a shortage of everything. The offices needed to be stocked with essentials like disinfectant wipes and masks for staff and clientele, but there was a long period where nothing could be found. Thankfully the team at TitleSmart is just that – a team. A joint effort to equip company offices was quickly underway. Staff members would even text Cindy late at night if they managed to score a hard-to-find item.
Nearly everything about day-to-day work had to change. The team was issued clipboards so they could hand papers to consumers who sat in their cars for “no contact” signings. Meanwhile, the “little things” Cindy’s team does to help clients feel welcome had to change a great deal. In the past, they’d bake fresh cookies and have an assortment of other goodies for clients taking the next big step in their lives. It was an important way the TitleSmart team connected with customers.
Thankfully, having to change the way you connect doesn’t mean giving it up entirely. Though the homemade touch of fresh baked cookies has to be put on pause, Cindy and team are still making yummy goodie bags for their closers. The focus of ensuring everyone feels welcome is more important than ever, and it’s something everyone at TitleSmart is taking very seriously.
Cindy notes that she refuses to lock her doors. She has no intention of making anyone do something they don’t want to do during these difficult times. Accommodations are being made both for those who want as little human interaction throughout the process as possible, and for those who still want that in-person experience.
The most critical takeaway from the discussion with Cindy is that connection isn’t impossible right now. It simply requires a little bit of innovation. Our situation may be a complicated one, but it’s one that we’re all in together. Making your team feel valued and showing your clients that you’re still willing to go the extra mile no matter what it may look like is the smartest business move that you can make right now.
Right now, even the most seasoned experts find themselves unsure when we’ll be able to return to some semblance of normal. To add to that, it’s projected that it could be months or even years before we’re able to return to business as usual across the board. Now that most states have found themselves in over a month of their shelter-in-place orders, real estate experts have started compiling tips to try and help their fellow agents navigate these uncertain times.
A group of marketers came together for Forbes to offer twenty tips on how to seize the day until our day-to-day gets familiar again. Included in the tips are bits of advice like how to avoid being too aggressive while buyers find their footing, and to offer virtual product training to your agents.
Allie Beth Allman, Realtor to former President George W. Bush, spoke about the importance of not panicking and learning to adapt during an uncertain market. Allman also discusses the importance of remaining calm and not acting reactively here.
Meanwhile, New York broker Eric Benaim offers tips on winning business and staying positive while we find ourselves in a downturn. After starting his firm in 2008, Benaim has experience in working through economic anxiety. You can check out Alliant National’s COVID-19 Resource Page for more information on how you can keep your closings safe and your business moving forward during these tumultuous times. We also recently hosted a national webinar with many more tips on how to stay engaged with your Realtor clients.
When we listen, we can detect areas in which to offer help and provide tools.
The best, most effective strategies for acquiring and maintaining new business do not depend upon the delivery of pastries or a free lunch. Today, gaining business means searching for and then filling needs, recognizing gaps, appealing to goals, and ultimately providing tools for achieving those goals.
A defined process that leads to a better understanding of a prospect’s pain points, coupled with a plan of attack, enables a title agent to bring value to clients.
We’ve all been there. After weeks, perhaps months, of professionally approaching a real estate agent or lender prospect, the much-sought-after initial meeting gets scheduled.
Our thoughts turn toward how best to provide value to the prospect, within the bounds of compliance, that will sufficiently attract them to begin using our services.
Too often, however, our approach centers around providing the laundry list of goods and services our company offers. We run through that list hoping that at some point our prospect will react favorably and drill down into the particular offer they find irresistible.
In reality, this approach almost never works. What we have unwittingly done is wasted the prospect’s time by offering products or services that are not needed. The meeting ends with a polite “thank you,” and “we will let you know.”
There is a better approach, and it involves putting ourselves in the place of our potential referral source so we can view their business challenges through their eyes. It is a given that they are faced with the same type of struggles we face when trying to obtain business. They are seeking ways to attract their own referral sources, and they are spending time and money to do so.
Instead of laying our tools on the table hoping one will be useful to our prospect, the better approach would be a consultative one. Use the first five minutes of the meeting asking questions about business strategy and goals, methods currently being employed, and the history of success and failure.
When we listen, we can detect areas in which to offer help and provide tools.
For real estate agent prospects, this may involve keying-in on monthly meetings put on by the broker in charge. It is their obligation to provide meetings and speakers to bring value to their franchise, and to attract and keep top agents.
An offer to sponsor the food, as well as line up industry speakers, will go a long way toward obtaining an endorsement from the broker, while earning valuable face time with the agents with whom we are trying to connect. Providing a short segment on title insurance itself will show your prospects that you are a subject-matter expert and worthy of their consideration.
For lender prospects, offer to line up a real estate office presentation, with them as the main speaker, on lending topics of interest to agents. Again, offering to help with the food, line up the presentation, and participate in the program will bring value to your relationship with that lender. It is possible to work collaboratively with your prospects, employing a consultative approach and filling needs and gaps to help them in their business. This places you and your agency top-of-mind when the decision is made for title work.
