As a dedicated member of the real estate bar, you are likely well aware that client service doesn’t end when a transaction closes. If a client approaches you with a potential title insurance claim, that client will count on you to assist and will likely view their experience with the title insurer as an extension of the client service that you provide to them.
One of the best ways to ensure client satisfaction with their potential claim is to make sure that matters are reported promptly. The key reason for prompt reporting of a claim is to provide the TitlePLUS claims team the opportunity to review all available options for resolving a claim, and to avoid prejudicing our position by delay or through actions taken by the policyholder or their lawyer before the claims team has had a chance to complete an investigation. This is why the TitlePLUS Policy contains a condition requiring timely reporting.
Timely reporting is especially important with respect to claims that might involve litigation. Over the years, we have received many claim reports several months or even a year or more after a dispute arose between our policyholders and their neighbours that resulted in litigation (e.g. over access to the property or an encroachment). Only after legal fees start to add up does a policyholder report a claim, hoping to be reimbursed for fees paid to date and asking TitlePLUS fund the ongoing litigation.
By failing to report in a timely fashion the policyholder may hamper our ability to undertake a full investigation of the matter and may impact the availability of coverage for legal fees already expended. With prompt reporting we can explore options for a resolution that could avoid litigation or if litigation is required, we can immediately seek the assistance of experienced external counsel who will work with TitlePLUS to protect our policyholders’ interests.
Late reporting of claims can also have significant implications with respect to situations involving work done to a property by a previous homeowner without benefit of a building permit that results in an order from the local governmental authority forcing a policyholder to bring the property into compliance. Examples of this kind of work may include replacing a deck, finishing a basement or even building an entire addition. TitlePLUS works with experienced external adjusters to assess what is needed to satisfy an order in the most cost-effective way. We can also gather information on the defective work for later use in recovering our costs under our subrogated rights.
If a policyholder proceeds with repairs or renovations before we can investigate with our adjusters, engineers and contractors, the available coverage may be reduced if that work was not completed in as efficient a manner as possible or caused prejudice to our ability to recover our costs down the road.
TitlePLUS subscribing lawyers play an important role in ensuring our policyholders receive the full benefit of coverage under the TitlePLUS Policy. It’s important to obtain prompt instructions to report on behalf of your clients when a problem is discovered, before they attempt to repair a problem themselves. TitlePLUS will work with you to review available repair options which could range from supporting you in completing the repair to retaining external counsel with extensive repair experience to review options and make recommendations.
By involving TitlePLUS in the process, you can provide your clients with peace of mind that TitlePLUS is taking responsibility for resolving the problem and managing the risk of a potential claim against you in the event things go awry.
Reviewing a claim and suggesting possible repairs takes time, so reporting late (especially if a closing is imminent) may limit the repair options available which could place you at risk of a potential claim if the policyholder incurs a loss that could have been covered had the matter been reported earlier.
We understand that late reporting is often not intentional. The homeowner may have simply forgotten they had a TitlePLUS policy or may not be aware that it applies to their situation. A lawyer may be confident that they can fix the problem and see no need to report. Sometimes a lawyer acting for the homeowners now may not be the one who originally placed the policy and may not be as familiar with title insurance and the need to report a claim. Intentional or not, late reporting is best avoided given the potential negative consequences.
When discussing the TitlePLUS Policy with your purchasing clients, we encourage you to emphasize the importance of prompt reporting to your clients so that they can benefit from coverage under the policy to the fullest extent possible in the event of a claim.
