Insuring Properties with Access Issues
A common source of claims revolves around access issues, either due to a complete lack of a legal right of access or a mistake in providing additional coverage over access matters. The base ALTA title insurance policies have built-in coverage for a legal right of access in Covered Risk 4, and enhanced coverage policies like the ALTA Homeowner’s Policy include additional coverage for vehicular and pedestrian access in Covered Risk 11. Your customers may also request endorsements related to increased coverage for access rights, generally the ALTA 17 series of endorsements.
For this reason, it’s important to know where you stand on access when insuring a real property transaction. The property may have direct access, where the property abuts a public road, so that there is a legal right of access for the purposes of our base policy coverage. The property may have indirect access, where the only means of access is by an easement that is used to get to the nearest public road. Keep in mind that, in both scenarios, the property may not have curb cuts or an established means of vehicular or pedestrian access for enhanced coverage.
If you have indirect access via a recorded easement interest and are asked to insure or are required to insure as the only means of access:
- Search and examine the adjacent property that the easement cuts across to benefit your property being insured.
- List specific exceptions of recorded matters affecting the easement property.
- Specifically describe the easement in Schedule A.
- Take exception to terms and conditions of the easement agreement.
If you have landlocked property, another access issue or a question regarding enhanced/increased access coverage, feel free to reach out to your local Stewart underwriter for guidance or visit Virtual Underwriter for more tips like this.
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