- March 09, 2001
- All New York State Office Counsel, Managers and Agents
- TIRSA Owner's Extended Protection Policy (TOEPP)
Effective January 11, 2001, the New York State Insurance Department approved a new form of owner's title insurance policy for use in New York. Known as TIRSA Owner's Extended Protection Policy, or "TOEPP", this new policy form broadens certain protections that have previously been available to our insureds and includes new areas of coverage that, until now, have not been associated with title insurance policies in New York. This memo will highlight certain aspects of the use and content of the new policy.
First, please be aware that TOEPP is not intended to replace the ALTA Owner's Policy (10/17/92). That policy continues to be available for use. There is no requirement that TOEPP be issued for any given transaction and in fact, it will not be available at all for some transactions. TOEPP is available to purchasers of improved 1-4 family residential properties only. It may not be issued for unimproved properties. Pursuant to the TIRSA Rate manual, the insured may only be an individual person (or persons) or the trustee of a living trust, even if the trustee is not an individual person. There is no corresponding (extended coverage) loan (mortgagee) policy.
The premium to be charged is 120% of the amount charged for the 10/17/92 ALTA Owner's policy. Simultaneous loan policy premiums will continue to be calculated as currently provided in the TIRSA Rate Manual.
Insuring provisions of the policy are denominated as "Covered Risks". Amoung the items which are now covered or insured by the new policy are certain "post policy" contingencies, an expanded definition of "access&" to the insured premises to include specifically "actual vehicular and pedestrian access", the accuracy of the street address of the premises and certain losses suffered by reason of violations of zoning law or regulation.
Likely to be among the most talked about new provisions of the TOEPP are Covered Risks 14-16 because they address matters of zoning, subdivisions and building permits. Please be advised however that these provisions do not necessarily insure the accuracy of ancillary "departmental" or "municipal" searches. These provisions insure against the cost of forced removal of certain structures or parts of structures which offend zoning law, subdivision law or which may have been built without the benefit of a building permit from the applicable governmental authority. That does not necessarily mean that the issuance of the TOEPP will stand for the proposition that all of the structures (or parts thereof) which exist at the insured premises as of the date of the policy were, in fact, built in accordance with local building codes, zoning or subdivision law, or that any particular dormer, deck, pool, etc., is "legal".
Additional new features include a deductible amount to be absorbed by the insured prior to actual monetary liability on the part of the insurer and a maximum dollar amount of liability on the part of the insurer for certain covered risks. These amounts are set by the terms of the policy form as filed with TIRSA and are not negotiable. Also, the policy contains a self operative provision which increases the policy limit of liability by 10% per year for each of the first five years of the policy to a maximum of 150% of the policy amount. Unlike the Market Value Rider to the ALTA Owners Policy, there is no additional premium to be charged for this coverage.
Issues of continuation of coverage are specifically addressed by the terms of the policy. As with the ALTA policy, coverage continues in favor of the names insured as long as she owns the insured premises or "owns a mortgage from anyone who buys" the premises or is liable on any "title warranties" made. Coverage also continues in favor of those who acquire the insured premises as a result of the dissolution of a marriage to the named insured, the trustee (or here successor trustee) of a trust to whom the insured transfers title after the policy date as well as the beneficiaries of that trust upon the death of the named insured.
As with the more familiar ALTA policy form, TOEPP will contain exclusions from coverage and will of course, contain a Schedule B which will contain specific exceptions from coverage in any particular transactions.
Attached to this memo is a copy of the TOEPP for your review. Numbered policy jackets are available by request from Maria D'elia in the Syracuse branch office at (800) 433-4697. If you have any questions concerning the content of the policy or the content of this memo, please contact company counsel.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.