§14.20 - Extended Coverage

• Jurisdiction: Washington

§14.20 EXTENDED COVERAGE

An extended coverage policy deletes all or some of the "standard" or "general" exceptions. However, if there are adverse matters they will be excepted in Schedule B as "special" exceptions. Extended coverage policies usually involve an additional premium surcharge that is typically paid by the buyer or borrower.

The title company will make off-record inquiries including an inspection of the property, and will usually require (especially for an extended coverage owner's policy) a boundary and improvement survey, to be provided by one of the parties to the transaction. Surveys should be prepared and certified in accordance with minimum standards set by the ALTA and the American Congress on Surveying and Mapping (ACSM) (see Form 14-37 on the CD accompanying this deskbook and the ALTA website at http://www.alta.org, or the ACSM website at http://www.acsm.net ).

The title company will also attempt to determine whether there are potential labor or material lien rights. If so, it will take steps to reduce the risk that lenders, in particular, will ask the insurer to assume by insuring priority of the mortgage over such statutory rights. This is a significant risk for title insurers. (See Form 14-18 on the CD accompanying this deskbook for an additional discussion of mechanics' lien coverage.)

Requesting extended coverage does not mean the insurer will automatically ignore or insure around a known off-record title defect. However, the insured may presume that as to all other matters not specifically excepted, the policy will insure against...