Obtaining title insurance is one of the most important steps in completing any real estate transaction. Generally, lenders require buyers to obtain title insurance as a prerequisite for loaning on a property. Unfortunately, most buyers feel that once they obtain a title insurance policy they are free and clear regarding any title dispute over the property. In this post, we discuss the general scope of a title insurance policy.
Title insurers must defend an insured against litigation filed by a third party that involves an alleged defect, lien, or encumbrance or other matter insured by the policy. (Liberty National Enterprises, L.P. v. Chicago Title Insurance Company (2013) 217 Cal. App. 4th 62, 76-77.) The determination regarding whether the insurer owes a duty to defend usually is made by comparing the allegations in the complaint with the terms of the policy. (Id at 76.)
Further, where a lawsuit involves some claims that are covered by the title insurance policy and other claims that are not, the insurer’s duty to defend the entire action stem from the terms of the policy. (Id. at 76-77.) The 2010 California Land Title Association standard form policy and the 2010 American Land Title Association standard form policy both provide that the insurer will defend title only as to the part of the action based on a covered risk and which is not excluded from coverage under the policy. Accordingly, buyers should review the terms of their policy very carefully in order to know what risks their insurer will and will not cover.
The attorneys at Schorr Law, APC have dealt with many disputes involving title to California real estate property, especially property located in Los Angeles County. For help with your property dispute, you can contact one of the attorneys at Schorr Law, APC at 310-954-1877, email@example.com or by using the contact us box on this page.