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Most Common Types of Title Insurance Claims

A comprehensive title search can help uncover any title defects that might be associated with your property. Your title insurance provides protection for you from title problems that may become known after you close your transaction. So what are the most common types of title insurance claims?

Here are some of the most likely title insurance claims you’ll see:


  • Inappropriate execution. This is likely the most common kind of claim, due to any number of issues, like having an incorrect name, wrongly describing the property, or improper witnessing or notarization. This kind of claim generally occurs due to errors in processing documents by the title agency.


  • Priority disputes. This kind of dispute is also quite common. The problem here usually arises in the title search, although there are other ways. Priority disputes almost always come up as a result of the filing of a foreclosure action by a lender or bankruptcy by the mortgagors.


  • Open equity lines. Due to the refinancing boom the last few years, open equity lines have become more and more evident. This type of claim usually originates from borrowers who place a first mortgage on their property, then take out an equity line of credit secured by a second mortgage. At some point, the same borrowers refinance, intending that the proceeds from the refinance will pay off both mortgages. Unfortunately, many times the open equity line is not closed properly and the related mortgage is not released.


  • Closing problems. This kind of claim has increased significantly due to the rising number of title claims. They usually pop up when a buyer or borrower sues all parties involved in the transaction.


  • Direct claims. Believe it or not, there is a relatively small amount of claims that involve cases filed directly against a title agency or title insurance company. Litigation is usually filed against the insured by the title insurance company or a party that contracted with the title agency for services.


These are just five of the most common kinds of title claims. In truth, there are as many kinds of title claims are there are grains of sand on the beach. If you have questions or concerns about title insurance claims and the best ways to protect your assets from litigation and claims, please contact one of our agents today.

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