Lodging a title insurance claim
Title insurance covers risks that a standard title search might not reveal — undisclosed easements, boundary encroachments, planning non-compliance, and fraud. When a covered defect is discovered, the claim process requires prompt notification and thorough documentation to avoid policy defences.
This is an 8-step workflow for lodging a title insurance claim in Australia. It covers reviewing the policy, notifying the insurer within time, assembling the evidence, and negotiating the outcome — whether that is rectification of the defect or a monetary payout.
Before you start
- The title insurance policy document and certificate of insurance
- Details of the title defect or issue discovered
- Title search and any survey reports evidencing the defect
- Records of any financial loss incurred or remediation costs
The workflow
Review the policy coverage and exclusions
Read the title insurance policy carefully to confirm the discovered defect falls within the covered risks. Check the exclusions, conditions, and any endorsements. Identify the policy limit and any excess payable.
Check notification requirements and timing
Identify the policy's notification obligations — most require prompt written notice "as soon as practicable" after discovery. Late notification can be a basis for the insurer to reduce or deny the claim under section 54 of the Insurance Contracts Act.
Prepare and send the notification
Draft a written notification to the insurer setting out the nature of the defect, when it was discovered, the potential loss, and the policy number. Send it by the method specified in the policy (usually email or registered post).
Assemble the supporting evidence
Compile the title search, survey plans, council records, correspondence revealing the defect, quotes for rectification, and any legal opinions. Prepare a chronology of events.
Quantify the loss
Calculate the financial impact of the title defect. This may include diminution in property value, rectification costs, legal costs incurred, and any consequential losses. Obtain professional valuations if the diminution in value is disputed.
Respond to the insurer's assessment
The insurer will typically appoint a loss adjuster or solicitor to investigate. Respond to requests for information promptly. Challenge any denial or coverage dispute with reference to the policy wording and the Insurance Contracts Act.
Negotiate the settlement or remediation
Negotiate with the insurer on the appropriate remedy — whether that is a monetary payout, the insurer funding rectification of the defect, or the insurer defending a claim brought by a third party. Ensure any settlement is documented.
Finalise and document the outcome
Execute the settlement deed if a monetary settlement is reached. If the insurer has funded rectification, confirm the works are complete and the defect is resolved. Update the client and close the claim file.
What you will have at the end
A resolved title insurance claim — either through monetary settlement covering the client's loss, insurer-funded rectification of the title defect, or insurer-managed defence of a third-party claim.
Common issues
- Late notification giving the insurer grounds to reduce the claim
- Not checking policy exclusions before advising the client that the defect is covered
- Inadequate quantification of loss leading to under-settlement
- Failing to challenge an insurer's reliance on section 54 defences where the prejudice is minimal
- Not preserving the client's rights to dispute resolution if settlement negotiations stall
Run this workflow on a real matter
Quillio reviews title insurance policies and identifies covered risks, exclusions, and notification deadlines. See /practice-areas/property-lawyers or start a free trial.
This workflow covers standard title insurance claims. Complex claims involving fraud, forged mortgages, or multi-party disputes may require additional steps and specialist advice.
Try this workflow with Quillio.
Quillio can run this workflow on a real matter, with citations to current AU authority on every step. The free trial requires no credit card.
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