In every property transfer, title insurance is a must — it protects against defects in ownership that occurred before closing and ensures there are no issues or disparities concerning property ownership down the line. While most buyers are aware of title insurance itself, it’s a little less common to have a thorough understanding of endorsements, which are a key component of many title insurance policies. In this article, we’ll break down what title endorsements are, the types of common endorsements, when they might be necessary, and when they’re not. 

What is a title endorsement?

Endorsements are an add-on to a title insurance policy that expands, clarifies, or modifies the scope of coverage in some way. While a regular title insurance policy provides basic protection against common title issues — such as liens, defects in ownership, or errors in legal records — an endorsement is customized to address specific risks that may not be fully covered under a standard policy. In some cases, endorsements are requested by lenders to satisfy underwriting requirements. In others, they’re obtained by owners who want added protection against risks. 

Common endorsements

There are many different types of ALTA (American Land Title Association) approved endorsement forms available to customize title insurance policies. Here are a few examples of commonly used endorsements:

• Survey/boundary endorsement (ALTA 9 or equivalent): A land survey gives the property owner and lender an analysis of the property’s size, features, and official boundaries. A survey endorsement protects against any mistakes or issues with the existing land survey. 
• Access endorsement: In order to secure financing, many lenders require a property to be accessible year-round via a public road. If year-round public access is not possible for your property, you can still be covered with an endorsement. 
• Encroachment or easement endorsement: An easement is a non-posessory right to access or use a portion of private property for a specific purpose. An encroachment is when a feature illegally intrudes on an adjoining property line. This kind of endorsement provides coverage against losses — such as damage to or removal of structures — in the event of an easement or encroachment issue. 
• Condo endorsement: This type of endorsement protects owners and lenders from risks that are specific to condominium ownership, like rules and restrictions from the condo association, shared common areas, unpaid association dues, and compliance with existing condo laws. 
• Mechanics lien/construction endorsement: A mechanic’s lien is a legal hold placed on a property title by a contractor who has not been paid for their labor. This type of lien applies to personal property like vehicles, but can also apply to real estate that is undergoing construction or remodeling. A construction endorsement covers losses or property damage that occurs to a home that is currently under construction or being renovated. 
• ALTA 49 and 49.1: These are two new specialized title insurance endorsements introduced to combat the rising risk of seller impersonation, forgery, and fraud. The ALTA 49 endorsement offers post-policy coverage for deed or mortgage forgery, while ALTA 49.1 offers post-policy coverage for homeowners who have previously purchased an ALTA Owner’s Policy. 

When endorsements are worth it

Title endorsements are a great option for extra coverage in your policy — but how do you know when you need one? Because they provide additional coverage, every title endorsement will also act as an additional fee on top of your standard title insurance premium. They can typically cost anywhere between $50 to $200, but can also be based on a percentage of the policy premium, so it’s important to know when to invest. 

• High-value purchases: The higher the value of your purchase, the higher your risk exposure — especially when purchasing multi-unit properties. A title endorsement can also come at a relatively small premium when compared to the potential for loss in high-value transactions. 
• Older homes: Historic and older homes can come with unique issues like unusual lot configurations, a complex history of ownership, and are more likely to have boundary and encroachment issues. 
• Rural properties: Properties and land purchases made in more rural areas may have access issues, complex legal descriptions, easements, and other challenges that aren’t typically covered in a standard title insurance policy.
• New construction: New construction properties come with a risk of inheriting mechanics lien, platting discrepancies, and land survey issues. 
• Commercial transactions: Because of the complex nature of commercial transactions, title endorsements are almost always necessary and required by the lender. 

When endorsements may not be necessary 

In many situations, an endorsement may not be necessary at all. For example, a low-risk platted subdivision with a recent land survey, or an all-cash purchase where the buyer already has comprehensive knowledge of the property, may not warrant additional coverage. Additionally, some endorsements are required by lenders but provide little to no direct benefit to the owner. Ultimately, endorsements aren’t simply “add-ons.” They’re strategic risk-management tools that, when used thoughtfully, can strengthen your protection and improve your overall position.

Choose the right endorsements with help from Landtrust Title

When it comes to purchasing title insurance, the goal is not to buy everything — it’s to buy the right protection. By working with a trusted title professional like the ones at Landtrust Title, you can better understand the type of coverage you need and what will work best for your situation. 

If you’re a buyer or a real estate agent with questions about title endorsements, Landtrust Title is happy to review endorsements and explain them before closing so buyers can make an informed decision. We’re happy to answer any questions you may have, and are dedicated to helping you feel informed and confident throughout the process.