Title insurance is a key component of many real estate transactions. Mortgage lenders typically require that buyers purchase lender policies. Most homeowners also acquire policies that protect their interest in the home.
Title insurance companies, like other insurance-based businesses, should uphold the policies that they issue in good faith. Occasionally, real estate owners may need to initiate litigation against a title insurance company that has acted in bad faith and denied them coverage.
When is title coverage necessary?
Most homeowners want to protect their title rights, as that is what secures their interest in the home. They expect their policy to protect them if a costly and unexpected title claim arises after they assume ownership.
Denying a valid claim is an example of bad faith insurance practices. When companies don’t uphold their policies, the people who paid for coverage as a closing cost may need to take legal action. Between their down payment and the equity slowly accrued over time through monthly payments, price appreciation and property improvement, their investment in the home can amount to hundreds of thousands of dollars or more.
Unfortunately, sometimes property owners with title insurance policies face credible claims against their real property. Even worse, their title insurance company may try to deny them coverage to pay for legal support or reimburse them for lost equity after a lawsuit.
Real estate litigation brought in response to a title company’s questionable conduct can be difficult for people to navigate without appropriate support. Seeking strong legal guidance can make it easier to hold title companies accountable for failing to uphold the policies they issue.
