When issuing an Owner's Policy, the schedule of title insurance rates applies to the fair value of the property insured, which is which?

When issuing an Owner's Policy, the schedule of title insurance rates applies to the fair value of the property insured, which is which?

• A. FULL VALUE, INCLUDING ALL ENCUMBRANCES OF RECORD, EXCLUDING BLANKET ENCUMBRANCES
• B. MARKET VALUE ONLY
• C. PURCHASE PRICE ONLY
• D. TAX ASSESSED VALUE

Answer: (A)

For an Owner’s Policy, the rate is based on the amount of insurance, which tracks the property’s fair value. That fair value is defined as the full value of the property insured, including encumbrances of record (such as liens or mortgages that affect title), but excluding blanket encumbrances that apply to multiple properties. This matters because the premium reflects the risk to the title up to the insured amount, and encumbrances of record are part of the title risk for this specific property, while blanket encumbrances aren’t tied to this property alone. So the correct choice is the full value, including all encumbrances of record, excluding blanket encumbrances.

For an Owner’s Policy, the rate is based on the amount of insurance, which tracks the property’s fair value. That fair value is defined as the full value of the property insured, including encumbrances of record (such as liens or mortgages that affect title), but excluding blanket encumbrances that apply to multiple properties. This matters because the premium reflects the risk to the title up to the insured amount, and encumbrances of record are part of the title risk for this specific property, while blanket encumbrances aren’t tied to this property alone. So the correct choice is the full value, including all encumbrances of record, excluding blanket encumbrances.