In the previous post, I focused on the most basic aspects of title insurance. Now, I’ll go one step further and discuss another essential point relating to title insurance: claim-filing procedures.
But before diving into this topic, there’s something every lender and landowner should know. Although title insurers perform a “title search” before issuing a policy, they can’t guarantee perfect titles. As a result, title-related problems may occur after the policy is issued.
Most title policies include many dispute resolution options that can make the claim difficult to settle, especially when more parties are involved. When insurers are unable to resolve disputes amicably – sometimes it happens, regardless of how hard they try – a title insurance claim may lead to costly, lengthy litigation. In the vast majority of cases, however, the insurance company will compensate the insured for his financial loss resulting from title defects it should have discovered.
How to File a Title Insurance Claim
Claiming for title insurance is very much like claiming for any other type of insurance. When title-related problems arise, all you need to do is to inform the insurance company as soon as you can and submit your claim in writing. Below are the steps you should take when submitting a title claim.
- Review your title policy. Reviewing your title policy before you file the claim is important to ensure you have a valid claim. If some defects appear as exceptions to coverage, for example, they aren’t covered by the policy.
- Follow claim procedures strictly. Failure to comply with the procedures included in your policy could result in a claim denial. For instance, title insurance policies include a clause that requires policyholders to notify their insurers of any title defects promptly, in writing, and provide proof of loss within 90 days. If the insurance company is unable to complete its investigation and defend against your claim due to late notice, it may deny your claim. Also, if the company accepts your claim but has to cover additional costs to cure the defect due to your failure to notify it within the period prescribed, it may pass the extra costs on to you.
- Submit the claim in writing. To be considered, a title claim must be submitted in writing and contain the following information: the statement of the claim, which is a brief explanation of your request; personal information (name, address, telephone number and email address); full property address or the Assessor’s Parcel Number (APN) and/or a legal description of the property; documentation that supports your claim (copies of the final settlement statement, HUD-1, title insurance policy, title search report, notices received from the adverse party, proof of loss and any other documents that support your claim).
As soon as you file your claim, the insurer has an obligation to investigate it without unreasonable delay.
Where to File Your Claim
If you’re one of our clients, there are several options to file your claim with Guardian Title & Trust. For information on how to do this and any other details about our products and services, please feel free to contact us at (904)-992-1169, email email@example.com or fill out our online form.