Most owners never file a title insurance claim, which is exactly the point of the policy. But the ones who need it are usually facing a letter from a stranger claiming an interest in their home, and they have no idea that the document in their closing file is the thing that responds to it. Here is what a title policy actually does when something goes wrong.
What triggers a claim
A claim arises when someone asserts a right in your property that your policy insured against. In practice that means a letter, a lawsuit, a lien appearing where none should be, or a title company telling you at your own sale that there is a problem in your chain.
The classic examples are the ones a search cannot catch: a deed in your chain that turns out to be forged, an heir nobody knew existed asserting an interest, a prior owner’s spouse whose signature was required and missing, a recording error at the courthouse, or an easement that was recorded but somehow never surfaced. Those are the risks the policy exists for, and they are covered in what title insurance covers.
The duty to defend is often worth more than the payout
An owner’s policy typically obligates the insurer to defend your title against a covered claim, at its expense. For most owners that is the real value. Even a claim that ultimately fails can cost more in legal fees than the premium ever did, and the defense obligation is what the premium bought.
What to do first
Do not answer the person making the claim, and do not sign anything they send you. A well intentioned reply can concede a fact you did not have to concede. Find your owner’s policy, which was issued after your closing, and notify the insurer promptly in the manner the policy requires.
Prompt notice matters. Policies generally require notice within a reasonable time and can limit coverage where late notice prejudices the insurer’s ability to respond. If you cannot locate the policy, the settlement agent who closed your purchase can usually help you identify the underwriter and the file.
What the insurer does next
It investigates. That means examining the record, evaluating whether the claim falls within coverage and outside the exceptions, and deciding how to respond. From there the insurer may clear the defect itself by obtaining a release or a corrective instrument, defend you in litigation, negotiate a resolution, or pay the loss up to the policy amount.
Which route it takes is generally the insurer’s decision rather than yours, and that is worth understanding in advance. The policy insures against loss from covered defects. It is not a promise to pursue whatever outcome the owner would prefer.
Where claims get denied
Two places, and both are on Schedule B of your policy. The first is the exceptions: the specific items the policy expressly does not cover, which usually include the easements, covenants, and restrictions the search found and disclosed to you. Those were never insured, because you were told about them before you closed.
The second is the standard exclusions, which commonly include matters created by the insured owner, matters known to the owner and not disclosed, zoning and government regulation, and defects arising after the policy date. A boundary problem a survey would have revealed can also fall outside coverage depending on the policy and whether survey coverage was obtained.
Read Schedule B before you need it, not after
The exceptions page is the part of a title policy nobody reads and everybody is surprised by. Reading it at closing, when you can still ask questions and sometimes still get an item cleared, is far more useful than reading it the week a claim arrives.
Why the lender’s policy does not help you
If you declined an owner’s policy and only the lender’s policy was issued, it protects the lender’s interest in the loan and not your equity. A defect that wipes out your ownership may leave the lender made whole and you with nothing. This is the single most consequential decision a buyer makes about title, and it is covered in whether you need an owner’s policy.
How we help
We issue policies, and when a claim question arises on a file we closed, we help you identify the underwriter, locate the policy, and understand what the exceptions actually say. We are not the claims decision maker and we do not represent you against the insurer, so where a claim becomes contested, your own attorney is the right person. What we can do is make sure you are not guessing about what you bought.
Received a letter about your title?
Send us what you received and your closing details, and we will help you locate your policy and understand what it says. Independent, attorney-led title and escrow across Virginia and West Virginia.
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Common questions
How do I file a title insurance claim?
Locate your owner’s policy from your closing file and notify the insurer promptly in the manner the policy specifies. Do not respond to the person asserting the claim and do not sign anything they send you.
What does a title policy actually pay for?
Loss from covered title defects up to the policy amount, and in most owner’s policies, the cost of defending your title against a covered claim. For many owners the defense obligation is the more valuable half.
Why would a claim be denied?
Usually because the matter appears in Schedule B as an exception, meaning it was found and disclosed before closing and never insured, or because it falls within a standard exclusion such as matters created by the owner or defects arising after the policy date.
Does my policy expire?
An owner’s policy generally continues for as long as you hold an interest in the property, and in some circumstances afterward. It does not renew and there is no ongoing premium, which is why the one time cost at closing covers an open ended period.
What if I only have a lender’s policy?
It protects the lender’s interest in the loan, not your equity. A defect could leave the lender made whole and you without protection. Owner’s coverage has to be purchased at closing.
Is there a deadline to make a claim?
Policies generally require notice within a reasonable time after you learn of a claim, and late notice can limit coverage where it prejudices the insurer. Notify promptly rather than waiting to see whether the problem resolves itself.
This article is general information about title insurance claims in Virginia and West Virginia. It is not legal advice, and coverage depends on the specific policy, its exceptions, and its exclusions. A settlement agent is not the claims decision maker, so contested claims should be reviewed with your own attorney.