Title Insurance Claims

Denials of Coverage

Title insurance is meant to protect property owners and lenders from financial losses due to defects in a property’s title. However, claimants sometimes face denials of coverage, leaving them unprotected against title disputes. Insurance companies may reject claims for various reasons, including policy exclusions, pre-existing title defects, or allegations that the issue was known before the policy was issued.

A common reason for denial is that the title defect was considered a “known risk.” If the insurer determines that the claimant had prior knowledge of the issue and failed to disclose it, they may deny coverage. Additionally, title insurance policies contain exclusions and limitations that insurers use to avoid liability. These exclusions often include zoning violations, unrecorded easements, and certain municipal liens.

For property owners facing a denial of coverage, it is essential to carefully review the policy and seek legal counsel. A real estate lawyer can help challenge unfair denials by demonstrating that the claim falls within the policy’s coverage. If necessary, legal action may be taken to hold the insurer accountable.

Bad Faith Insurance Practices

Insurance companies are legally required to act in good faith when handling claims. However, some insurers engage in bad faith insurance practices to avoid paying valid claims. Bad faith occurs when an insurance company unjustly denies a claim, delays payment without reason, or fails to conduct a proper investigation.

Common signs of bad faith in title insurance claims include:

• Unreasonable delays in processing claims

• Failure to communicate important information about the claim

• Denial without a proper investigation

• Misrepresentation of policy terms

• Lowball settlement offers

If you suspect bad faith, you may have legal grounds to sue the insurer for damages. California law provides strong protections for policyholders, and courts can impose penalties on insurers who act in bad faith. An experienced real estate attorney can help you navigate the legal process and ensure your rights are protected.

If you are dealing with a denied title insurance claim or bad faith insurance practices, Borna, a trusted real estate lawyer in California, can help. Contact Borna at (888) 42-BORNA or visit the office at 2530 Wilshire Boulevard, 3rd Floor, Santa Monica, CA 90403 to discuss your case and protect your property rights.