Title Policy Frequently Asked Questions
We’ve compiled answers to some of the most common questions about Title Insurance,
helping you to better understand what solutions might be available.
Why might a Title Policy be needed?
These policies are also known as Defective Title policies. In any property related transaction – sale/purchase/re-finance, a report will be prepared on the title to the property by a solicitor and any “defects” in the title will be identified. The buyers/lender then have a choice whether to a) withdraw from the transaction b) continue with the transaction with knowledge of the defect (not normally an option where there is lender involvement c) try and negotiate a settlement with the seller/one of more third parties holding an interest in the defect with the cost and time constraints this may involve or d) in many instances purchase a Title Indemnity policy.
Can any problem or defect be covered?
No – there is not a generic Title Indemnity policy which is available which will cover each and every known/unknown title defect in relation to a property.
What types of policy are available?
Title insurance has been a thing for many, many years and over this period, insurers have seen multiple requests for cover in relation to a number of common title issues. As a result, insurers have responded with policies/policy wordings for a range of specific title defects including Access/Lack of Easement, Chancel Repair, Restrictive Covenants, Lack of Planning, Lack of Buildings regulations etc.
Is the premium paid monthly/annually?
The cost of arranging the cover is a one-off amount paid upfront which covers the period of insurance. Normally this is perpetuity but there are a few policies which have a fixed period of insurance.
Does the policy limit increase as property values rise?
Inflation provision is either included as a standard feature or as an optional extension in most policies.
What happens in the event of a claim being made against us?
Details of the existence of the policy SHOULD NEVER be disclosed to any third party without the authority of the insurer.
In the event of notification of a claim or a potential claim, the policyholder should notify the insurer as soon as possible. The insurer will then step into the policyholder’s shoes and take over the conduct of the matter. This would normally take the form of a) rebutting the claim and/or b) negotiating a settlement with the third party and/or c) paying compensation to the policyholder/lender.
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