Under particular circumstances, a Title Insurer will issue an endorsement to a policy originally issued by a different Title Insurer. We call this a “piggyback” endorsement, because it rides on the back of the other company’s policy.
A piggyback endorsement is made subject to all the terms of the original policy and any other endorsements already issued against that policy. It also contains an express provision that it does not provide coverage for any matters covered under the underlying policy.
The piggyback endorsement clearly begins its coverage as of the date of the underlying policy and only provides insurance for the period from that date through the effective date of the endorsement.
In other respects this type of endorsement is very similar to a date down endorsement. Ordinarily, a letter report is presented to the relevant parties showing what documents have been filed during the period from the policy date to the current date of the county records. This report does not actually affect the policy, but provides information to decide what needs to be done prior to closing on the proposed modification.
Based upon what the letter report reveals, a specimen endorsement will be provided to the lender, showing how we expect the final endorsement to appear. This endorsement will include “standard” policy exceptions related to gap, parties in possession, mechanic’s liens, survey matters, etc, which occur after the original policy date, unless these are separately resolved as part of the current transaction.
In addition to abstracting and examination fees, an additional premium will be charged for this endorsement, which is premium for bringing the date forward plus an amount for any additional funds advanced under the mortgage. The premium relates to the fact coverage period for the policy has been expanded. The amount of this premium will depend on factors such as the length of time the policy is extended, the policy amount, and particular risk factors which apply.