8A — October 11 - 24, 2019 — Insurance/Title — M id A tlantic
Real Estate Journal
www.marej.com
I nsurance /T itle
By Paula M. Zwiren, JD, MBA, CTP, Zwiren Title Agency, Inc. Negotiating a Title Insurance Policy
sey, there is more nego- tiation of the terms of the policy hap- pening than one mi ght think at first blush. The first step is W
guarantee as to the condition of title. As with other insur- ance, the general concept is that there must be a loss experienced for there to be coverage. In additional, title insurance covers defense costs for the covered risks not excepted or excluded. The title insurance docu- ments contain two main sec- tions – standard terms con- tained on the pre-printed Com- mitment Cover Letter and the Policy Jacket and the transac- tion specific details on the Com- mitment and Policy Schedules. Standard terms can be negoti-
hile the title policy price may not be ne- gotiable in New Jer-
ated utilizing select Endorse- ments. Transaction specific insurance can be negotiated through requests for Amend- ment to the title Commitment Exceptions and Requirements. Main Title Insurance Documents: - Commitment Cover Letter • Definitions • Terms, rights and re- sponsibilities of the proposed Insured and the Company - allows the Company to add Exceptions after the date and issuance of the title Commit- ment; clarifies the items that appear after the date of the Commitment but before all
of the Requirements set forth in the Commitment have been met can also be added as Ex- ceptions. - Commitment Schedules • Declaration Page – ie, amount of insurance, pro- posed insured, type of interest insured • Legal Description • Requirements to be met for the Company to provide insurance • Exceptions specific to the property and/or transaction which will not be covered. - Amendments to the Schedules
• Varies and requested based on changes to the proposed transaction. Two examples: changing the pro- posed insured because the individual buyer decided to take title under an LLC name and removing a Re- quirement because proofs have been provided. • Negotiating examples include changing coverage language. Two examples: re- quest to change an Exception from rights of parties in pos- session to rights of tenants, as tenants only, and adding language to an easement to reflect the words as shown on the Survey. - Endorsements • Standard State-wide forms filed with DOBI • Extensive offerings avail- able for the both the Owner’s and Loan Policy, including: limited coverage regarding encroachments, spreading the liability across multiple policies, zoning coverage, subdivision coverage. - Policy Jacket • Covered Risks • Exclusions – includes excluding loss resulting from many areas covered under police power and risks known to the insured and not dis- closed • Conditions – definitions, claim filing requirements and procedures, defense terms • Exceptions – includes the changes reflected in the amendments made prior to closing and often notes the Endorsements added to the policy that are attached. • For a loan policy – Sched- ule B II Subordinate Interests The best way to negotiate a title policy is to understand how the contract works and ask for changes desired. The Company is accustomed to change requests and will educate you regarding what is available and the require- ments for the coverage re- quested. If you are working with a title agent, the title agent will be able to negoti- ate with different insurance carriers for you to find one with the appetite to provide coverage to your specifica- tions. Paula M. Zwiren is President of Zwiren Title Agency, Inc. - Policy Schedules • Declaration Page • Legal Description
Paula M. Zwiren
to understand the parts of the contract that can be ne- gotiated. Title insurance is a con- tract of indemnity. It is not a
TITLE INSURANCE & SETTLEMENT SERVICES
www.ZwirenTitle.com 855-994-7365 Paula@ZwirenTitle.com
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