Breaking Down the Title Insurance Claims Process

While most homeowners never need to file a title insurance claim, knowing how to navigate the process provides peace of mind that your ownership rights are protected.

Filing a title insurance claim is straightforward by design. Your title insurance provider manages the entire process of investigating and resolving title issues, from negotiating with other parties to covering legal expenses. This guide walks through the steps of filing a claim and explains how your title insurance protects your property rights with minimal stress or effort on your part.

Title Insurance Coverage

Title insurance protects homeowners from hidden risks to their property’s title that weren’t discovered during the initial title search. While your title company conducts a thorough and accurate title search to present a clear title before closing, some issues can remain hidden such as forged documents, undisclosed heirs, or liens filed in the wrong jurisdiction.

When you file a claim, you won’t pay any additional fees or costs. The one-time premium you paid at closing covers everything, including legal representation if needed. For instance, if an undiscovered heir makes a claim on your property, the underwriter will provide and pay for legal counsel to defend your title.

While mortgage lenders require lender’s title insurance to protect their interest in the property, this policy provides no protection for the homeowner. The extent of your title insurance coverage depends on the policy type. A standard owner’s policy covers common hidden risks like forgery, undisclosed heirs, or incorrect public records.

An enhanced policy extends protection to additional risks, including post-closing fraud and building permit violations. Enhanced policy coverage automatically increases up to 150% of the original policy amount over the first five years you own your home, providing additional protection as your property value appreciates. Both standard and enhanced policies will exclude items listed in the exceptions section of your policy.

Your title insurance remains active for as long as you own your home, even if you refinance. The coverage also extends to anyone who inherits your property or becomes a beneficiary through an estate-planning trust. Unlike other types of insurance that require annual renewal, your title insurance continues protecting your property rights with no additional premiums or fees beyond the one-time payment at closing.

When You Might Need to File a Title Insurance Claim

Title insurance claims arise when issues with a property’s title emerge after closing. A homeowner might need to file a title insurance claim if:

• A previous owner’s mortgage wasn’t properly released, leaving a lien on the property
• An unknown heir makes an ownership claim
• Documents in the chain of title were forged
• A neighbor disputes property boundaries based on an old survey
• The homeowner receives notice of unpaid property taxes from a previous owner

While situations that threaten an owner's title are rare, they do occur. These situations can threaten your property rights or create unexpected financial obligations.

While all known title issues are resolved during the title search before closing, some problems only surface months or even years after purchase. When these hidden risks emerge, your title insurance policy provides protection and a clear path to resolution.

Before Filing a Title Insurance Claim

Before filing a formal title insurance claim, you should take a few preliminary steps.

First, locate your title insurance policy. This was sent to you by mail or email after closing. If you can’t find your title insurance policy, contact the office where you closed. With proper identification, they can provide you with another copy.

Then be sure to review your policy carefully, paying particular attention to the exceptions. Exceptions are standard parts of title policies that lists items not covered by your owner’s title insurance. Many exceptions are standard and apply to all properties, while other exceptions are specific to an individual property. For example, if you purchased a cash sale property, certain items in the back chain of title might be listed as exceptions. Verify that your current issue isn’t listed among these exceptions.

Finally, you should contact your closing company directly, not the title insurance provider. For instance, if you see unpaid taxes on your settlement statement from a July closing, this may simply be a tax proration - where the yearly tax burden is divided between buyer and seller based on their time of ownership. Similarly, questions about mortgage releases or payoffs can often be resolved directly with your closing company before needing to file an insurance claim.

Your title company will work to address your concerns and determine whether a formal claim is necessary.

Filing a Title Insurance Claim

If your title company cannot resolve your issue directly, filing a title insurance claim is a straightforward process. The first step is gathering your documentation. You should already have your title insurance policy from the preliminary review, but you’ll also need related documents like your deed, mortgage documents, and any affidavits signed at closing. These documents help the underwriter understand your property’s complete history and identify where the title issue originated.

Next, locate your title insurance underwriter’s contact information on your policy. If you closed at a South Oak Title location, your underwriter is typically Stewart Title or Fidelity National Title Group. The underwriter’s name, phone number, and email address appear on the policy jacket. Contact them directly to initiate your claim.

When you reach out to the underwriter, explain your situation clearly and provide copies of all your documentation. The underwriter will guide you through any additional information they need to process your claim. They’ll also contact your title company to request the complete closing file and conduct their own investigation.

During their review, the underwriter examines all of the documentation to determine the source of the title issue. They verify whether the problem is covered under your policy and identify the best path to resolution. For example, if they discover that a lien was misindexed in county records or filed in the wrong jurisdiction, they’ll take steps to resolve it directly. The underwriter manages the entire claims process, including paying any associated costs or legal fees needed to clear your title.

What to Expect from the Title Insurance Claims Process

The title insurance claims process protects the homeowner’s interests while requiring minimal effort from the homeowner. Once you’ve submitted your claim to the underwriter, they take full responsibility for resolving the title issue. You won’t need to negotiate with other parties, hire attorneys, or manage complex legal proceedings. The entire process is hands-off for the homeowner.

The underwriter may resolve your claim in several ways. They might pay off an undisclosed lien, negotiate with other parties claiming an interest in your property, or correct errors in public records. If the title issue stems from a mistake like a misindexed document or a lien filed in the wrong county, the underwriter will work directly with local officials to fix the problem.

Throughout the process, the underwriter keeps you informed of progress while managing all the details. The title insurance claims process protects homeowners while requiring minimal effort from them. Your title company and underwriter manage the complexities of resolving title issues, from investigating claims to covering legal expenses. This allows you to maintain normal use of your property while professionals work to protect your property rights.

If you have questions about filing a title insurance claim, contact the office where you closed or reach out to your underwriter directly. At South Oak, we're here to help determine whether you need to file a formal claim or if we can resolve your concern directly. For more information about title insurance or to schedule a closing, contact your local South Oak office.