Owner's Extended Coverage: What It Is and Why Your Clients Need It

Section 8.1.3 of the Colorado Real Estate Commission Approved Purchase and Sales Agreement allows the parties to choose whether the buyer's title insurance policy will include Owners Extended Coverage (OEC) to maximize title insurance protection beyond the basic coverage.

With every title insurance policy, there are certain exceptions to coverage — several of these are referred to as "standard exceptions." The OEC Endorsement provides protection against many important items that standard title insurance does not cover.

What OEC Covers

1. Parties in Possession

Protects against rights of others not disclosed by the public records.

2. Unrecorded Easements

Protects against the exercise of the right of use or maintenance of an easement not disclosed by the public records.

3. Survey Protection

Protects against any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the title that would be disclosed by an accurate and complete survey of the land.

4. Mechanic Lien Protection

Insures the owner against claims from suppliers of materials or labor furnished prior to the date of the policy.

Without OEC, the title policy will contain the above exceptions — meaning the insurance will not cover claims related to those matters. As an agent, ensuring your clients have OEC is one of the simplest ways to protect them after closing.

Questions? I'm happy to walk you through it. Brenna Harper — brenna.harper@ctt.com | 303-748-3965.