Coverage and coverage questions concerning AOLs

When it comes to what is included in a title insurance policy, many are familiar with the coverage. The new attorney opinion letters (AOLs) now on the market are a different story and many wonder what coverage is included.

Many are interested to know the basics of these AOL products.

“The coverage provided by an AOL can vary by provider,” said Stacy Mestayer, chief legal officer, Voxtur. “Our AOL was designed to provide comprehensive protection that is comparable to the protections provided by title insurance, while taking into account the ways in which title data and technology have evolved over the past 150 years since title insurance was created. The coverage underlying the Voxtur AOL covers the full amount of the loan and extends for the life of the loan. This coverage follows the loan into the secondary market, regardless of how many times it changes ownership. While certain coverage gaps may exist in other versions of the AOL, as the American Land Title Association (ALTA) has pointed out, those gaps have been accounted for in the coverage underlying the Voxtur AOL.

“The protections provided by the various versions of the AOL differ,” she continued. “Attorney opinion letters, in their traditional form, present certain risks because they may not be consistent from one to the next depending on this issuing attorney and coverage may not extend beyond the original recipient. There are also modern versions of the AOL that do not have comprehensive insurance coverage or that do not extend coverage to the borrower in a purchase transaction. These AOLs present their own risks. The Voxtur AOL was designed to protect against these risks, and to provide protection comparable to title insurance.”