Estimated reading time: 3 minutes
Understanding title insurance endorsements is an important part of the title insurance policy. All that may show on the settlement statement at closing may be a string of numbers, but what do they mean? Ask your settlement agent, but otherwise we want you to go in prepared.
What are endorsements?
Endorsements provide coverage past a standard title insurance policy. Your property may only have the most common, which we will talk about here. To understand endorsements, keep in mind residential properties may have different endorsements than commercial properties.
Understanding Common Residential Endorsements
If you are taking out a mortgage when you are purchasing your property, there are three endorsements that go with your title insurance policy. Now, remember, in title insurance with a mortgage there are two policies: the Lender’s Policy and the Owner’s Policy.
100, 300, 900 Endorsements
Endorsement 100, 300, and 900 are the most common endorsements that will be included on a Lender’s title insurance policy.
- 100 (Covenants, Conditions and Restrictions): This endorsement insures against loss or damage from a violation of any agreement set forth on the Lender’s policy.
- 300 (Survey Exception): This insures the Lender without exception for matters discoverable by a survey. Its also insures them against further loss or damage by encroachment of another property.
- 900 (Environmental Protection Lien): This endorsement provides coverage to the lender that the mortgage takes priority over those environmental protection liens that may be found in public records.
810 and 820 Endorsements
If you are purchasing a condominium unit or a property in a planned unit development, Endorsements 810 (Condominium) and 820 (Planned Unit Development) will be issued and included with the Lender’s title insurance policy.
- 810 (Condominium-Current Assessments): This endorsement gives more coverage in regards to condominium documentation. This applies also when a part of a policy where the insured land is a condominium unit. Included here is its percentage of interest in the common elements, like sidewalks and hallways.
- 820 (Planned Unit Development-Current Assessments): Again, for this type of property, you also get more coverage in regards to the Planned Unit documentation.
Understanding Commercial Endorsements
If you are purchasing a commercial property, the endorsements will be different. It’s important to understand what the changes mean. We are going to go over the two most common ones you may see.
The 910 is the Commercial Environmental Protection Lien endorsement that is equivalent to the residential 900. This endorsement is included with the Lender’s title insurance policy.
Commercial lenders may be able to negotiate their mortgage rate from time to time, and that is where the 710 Variable Rate endorsement comes in. This coverage insures the priority of the lien through any number of renegotiated interest terms.
Understanding the 1030 Endorsement – Restrictions, Encroachments, Minerals
Finally, we come to the 1030 endorsement. If you live in certain counties where there is oil and gas mining, your policy and commitment will have this listed at the end of your endorsements. This will go on the Lender’s title insurance policy. Also, this provides protection against damages to improvements that may cross over an area where there is oil drilling or mining.
Still Have Questions?
We know understanding title insurance endorsements isn’t easy. If you have questions about endorsements or title insurance in general, please contact us! We will be happy to assist you in any way we can. Also, we want to give a special thanks to title examiner Linda Cunrod for her help with this post.