Posted by mike-tx on June 11, 2000 at 14:15:26:
They would pay the amount of title insurance you purchased when you aquired the property. You can protect your investment by having a title search done and purchasing title insurance when you close on the property. Inform the title insurer at that time that you you will be investing a lot more money in the property to rehab it (or do new construction) and that you will need coverage for more than the purchase price, they can do it either by allowing you to purchase the larger amount up front or by giving you a commitment to issue the larger amount when you actually start spending money on the rehab. This is done by builders of new homes all the time.