Title Insurance
What is a Title Insurance Claim?
A title claim is an action against your title insurance policy. A claim arises any time an insured seeks to be reimbursed from their title insurer for issues that have arisen with the title to their property. While the title clearing process is intended to mitigate the risk of any claim arising, sometimes defects, liens, encumbrances, or other matters affecting title are not discovered during the title search.
In the same way that you would file a claim on your homeowner’s insurance policy if a tree branch were to fall through your roof, you would file a claim on your title insurance policy if some sort of covered infringement on your ownership rights were to occur. The key difference is that while other types of insurance focus on what could happen in the future, title insurance protects against what has occurred in the past.
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The Trigger
A title claim is generally triggered when you discover a title defect that causes you financial harm, or when someone brings an action against you seeking to assert some sort of right or interest in or to your property. This may be a governmental entity seeking to recover on a lien, unknown heir of a previous owner claiming an interest in your property, or a neighbor claiming that they gained a right of way by adverse possession, known in common parlance as “squatter’s rights,” during the time that the previous owner(s) held title.
If this happens, and the underlying issue was not excluded or excepted from your insurance policy, it is time to file a claim.
The Process
Like insurance you’re more familiar with (i.e. car insurance), claims get filed with the insurance underwriter.
The process for filing a claim against your title insurance varies, but there are a couple of key elements to mention. Details for filing a claim can be found in your title policy and it is important to keep a copy of this document.
Notify your insurer
The first step is to notify your insurance company of your claim. The process you should follow for notifying your insurer should be contained in the insurance policy itself. It is important to locate the section that contains the notification process as the specific section may vary. Often you will also be able to find this information on your insurer’s website, or by calling the insurer directly. It is important to follow the procedures laid out in your policy to best ensure that the insurer receives your claim promptly and can timely respond.
Handling the claim
Once you have followed the proper procedure to inform your insurer of the claim, the responsibility passes to the insurer to handle the claim. At this point, the insurer will review the claim and will likely ask for additional information necessary to make a complete analysis of the claim. The insurer will then determine whether your claim is covered under the terms of the title policy and will generally issue a coverage letter informing you of their decision.
If the title insurer accepts coverage of your claim, the insurer has multiple options for resolving the matter as outlined in your policy. The claims handling process, and the duties that title insurers have under such claims, can vary state to state and policy to policy.
The information provided on this site does not, and is not intended to, constitute legal advice. All content is for general informational purposes only and is not intended to provide a complete description of the subject matter. Specific processes will vary based on applicable law. The title and closing process will be handled by a third-party attorney to the extent required by law. Product offerings vary by jurisdiction and are not available or solicited in any state where we are not licensed.