The popularity of the Homeowner's forms, pricing provisions, and conflicting local practices have occasioned some confusion about when to issue a Joint Protection Policy (JP) and how to charge for it. Here are some helpful guidelines.
A Joint Protection Policy is one that insures both the buyer and his concurrent lender. In some circumstances the JP may also be used to insure both vendor and vendee under an agreement for sale.
The CLTA Standard Coverage Policy is uniquely structured to accommodate insurance of either an owner or a lender under one form. Neither the ALTA Owner's forms nor the Homeowner's forms are structured to accommodate issuance of a JP. In particular, it is not appropriate to add a lender as an insured when an ALTA Owner's Policy containing Western Regional Exceptions is issued to the owner.
There is no difference in coverage to the parties insured whether insured under a JP or separate CLTA Standard Coverage Policies.
There is no advantage in the pricing of a JP policy. The cost is the same as if the lender were to be issued a separate CLTA Standard Coverage Policy. See Section 3.1 A of the 6/9/08 Rate Manual.
It is helpful to remember that the exceptions in a JP apply to both insureds. When dealing with an installment judgment that has been paid to date, it is appropriate to show the judgment (and Acknowledgment of Satisfaction - Matured Installment if one is being recorded concurrently) as subsequent to the lien of the insured loan.
When insuring the DVA as vendor under an agreement for sale along with the veteran vendee, it is appropriate to use the JP form. Using the JP form in other cases may require additional steps.
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