Insuring high-end properties

Did you know that a title agency needs to submit a “Request to Issue Policy in Excess of Limits” for any commercial or residential transaction over a stated value? Most often, the threshold assigned is over a million dollars. What happens behind the scenes that most lenders, realtors, and clients are not aware of?

After the title search has been completed and all facts and documents have been reviewed, a request is submitted by the title agent to their Underwriter to issue. The request form generally contains questions to ascertain the risks involved and limit potential exposure to a claim.

The questions deal with potential construction, water or riparian issues, any outstanding liens being subordinated, easements, and whether title insurance has been turned down by any other Underwriter.

Frequently, known risks have been quietly shopped around by consumers until they find an Underwriter who has not identified the issue or who is willing to rule out potential claim rights.

Be prepared for the commitment to take a little bit longer on high-end transactions due to the above, as well as the possible need for further documentation or answers to satisfy the Underwriter.

No legal advice or suggestions are being given.

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