A title insurance claim starts with written notice to the insurer named on your policy. From there, the policy’s Conditions control what happens: the insurer investigates, may ask for a signed proof of loss, defends or brings a lawsuit if the matter is covered, and then either fixes the title problem or pays the loss.
This guide follows the Conditions of the 2021 ALTA Owner’s Policy, on which New York’s TIRSA policy forms are based. Since October 1, 2024, the TIRSA Rate Manual (Seventh Revision) has used the 2021 ALTA owner’s and loan forms, issued with New York endorsements. Your own policy and its endorsements govern your claim. These rules apply statewide, in New York City, Westchester County and elsewhere in New York.
For what the policy covers and excludes, see title insurance policy explained. For how specific problems play out as claims, see title insurance claim examples.
Before you file: find your policy and the insurer
The policy is issued by a licensed title insurance company, usually through a title agent. The agent ran the search and closed the deal; the insurer carries the risk and handles claims.
The final policy is delivered after closing, often to the buyer’s attorney, and usually sits in the closing file. The policy jacket names the insurer and contains the Covered Risks, Exclusions and Conditions. Schedule A gives the policy number, date, amount and insured. Schedule B lists the exceptions (see title search and title report). Attached endorsements can change coverage or Conditions. Condition 17 requires notice of claim to go to the address stated in the policy.
If the policy is missing, the title agent or closing attorney can identify the insurer and policy number from the closing file. The Department of Financial Services (DFS) publishes a directory of licensed title insurers and licenses title agents separately (agent licensing).
This guide follows the owner’s policy. A loan policy insures the lender, which makes its own claims (see owner’s vs lender’s title insurance).
How a claim moves through the policy Conditions
| Step | Condition | Who acts |
|---|---|---|
| Notice of claim | 3, 17 | Insured |
| Investigation and cooperation | 6 | Both |
| Proof of loss, if requested | 4 | Insured |
| Defense or lawsuit | 5 | Insurer |
| Cure, settle or pay | 7, 9 | Insurer |
| Valuation of loss | 8 | Insurer |
| Payment | 12 | Insurer |
| Subrogation | 13 | Insurer |
| Arbitration | 19 | Either (up to $2M) |
Step 1: Give prompt written notice (Condition 3)
The insured “must notify the Company promptly in writing” once it has Knowledge of any litigation or other matter for which the insurer may be liable, or when someone rejects the title as unmarketable, for example a buyer or lender who refuses to close. “Knowledge” means actual knowledge or actual notice, not constructive notice from the public records (Condition 1).
The policy sets no fixed number of days. Late notice does not void coverage on its own; if the delay prejudices the insurer, its liability is reduced “to the extent of the prejudice,” for example where a default judgment was entered before the insurer could defend.
A notice letter typically gives the policy number, insured name, property address, what happened and when it was discovered, and copies of the papers that raised the problem, with a request for defense if a lawsuit has been served. A court’s answer deadline keeps running while the claim is reviewed.
Step 2: Investigation and cooperation (Condition 6)
The insurer checks whether the matter falls within a Covered Risk, whether an Exclusion or Schedule B exception applies, and when the problem arose. It then issues a coverage position: acceptance, denial, or acceptance with a reservation of rights on specific issues.
The insured must give “all reasonable aid” in securing evidence, obtaining witnesses, litigating and settling. The insurer may require an examination under oath and production of records, including books, ledgers and checks. Failure to cooperate that prejudices the insurer, or refusal of an examination or records request, can end coverage for that claim unless the law prohibits it.
Step 3: Proof of loss (Condition 4)
The insurer may require a signed proof of loss as a condition of payment. It describes the covered matter and, as far as possible, the basis for calculating the loss. The 2021 form sets no deadline for submitting it, but the insurer can make payment depend on receiving it.
Step 4: Defense and lawsuits (Condition 5)
Defense. On written request, the insurer defends the insured “at its own cost and without unreasonable delay” against third-party litigation asserting a covered matter. The insurer chooses counsel, subject to the insured’s objection for reasonable cause. It does not pay for counsel the insured hires separately or for defending uncovered causes of action.
Lawsuits the insurer brings. The insurer may also bring its own action, at its expense, to establish the title as insured or to prevent or reduce loss. In New York, that may be an action to set aside a forged deed or to quiet title under RPAPL Article 15 (see deed theft in NYC). Bringing it is not an admission of liability. The insurer must act diligently and may appeal an adverse ruling in its sole discretion.
Step 5: The insurer’s options to resolve the claim (Conditions 7 and 9)
| Option | What it means | Effect |
|---|---|---|
| Cure | Removes the defect, lien or problem | Fully performs |
| Pay policy limit | Pays Amount of Insurance | Obligations end |
| Settle with others | Pays third party | Obligations end on that loss |
| Settle with insured | Pays insured’s loss | Obligations end on that loss |
Curing. Under Condition 9.a, the insurer “fully performs its obligations” if it removes the problem in a reasonable manner, by litigation or otherwise. If the insurer gets a lien satisfied or a forged deed vacated, the insured’s remedy is the cure, not a payment for the time the problem existed. Condition 9.b adds that when the insurer is litigating, it is not liable for loss until a court makes a final, non-appealable determination adverse to the title.
Paying the Amount of Insurance (7.a). Paying or tendering the full policy amount plus authorized costs to date ends the insurer’s liability, including any duty to keep defending.
Settling (7.b). The insurer can settle with the third party in the insured’s name, such as paying off a lienholder, or pay the insured’s loss directly. Either ends its liability for that loss.
Step 6: How the loss is measured (Condition 8)
The policy is a contract of indemnity for actual monetary loss. It is not an abstract or opinion of title, and claims under it are based in contract, not negligence.
The insurer’s liability is the lesser of:
- The Amount of Insurance in Schedule A, as adjusted.
- The difference between the fair market value of the title as insured and its value subject to the covered matter.
Value is generally measured on the date the insured discovers the problem. If the title to all of the land was void on the Date of Policy because of a covered matter, the insured may elect by written notice to measure value as of the Date of Policy. If the insurer sues to establish title under Condition 5.b and fails, the Amount of Insurance increases by 15% and the insured may elect to measure value at the end of that proceeding or on the date the insurer received the notice of claim. Defense costs and authorized expenses are paid in addition to the loss (Condition 8.e).
Hypothetical. An owner insured for $800,000 discovers that a recorded right of way, missed in the search, crosses the side yard. An appraiser values the property at $1,000,000 without the easement and $940,000 with it. The measured loss is $60,000, well under the policy amount. If the insurer instead obtains a recorded release of the easement, that cure satisfies the policy and no payment for diminished value is owed.
Market value coverage changes this math. An owner who bought the optional TIRSA market value endorsement may have coverage that reaches current value above the original policy amount; see what is title insurance.
Step 7: Payment and its effect on coverage (Conditions 10 and 12)
Once liability and the extent of the loss have been determined under the Conditions, the insurer pays within 30 days (Condition 12). Payments other than costs and attorneys’ fees reduce the Amount of Insurance dollar for dollar (Condition 10). A partial claim payment leaves less coverage for a later claim.
Settling on your own (Condition 9.c)
The insurer is not liable for liability “voluntarily assumed by the Insured” in settling a claim or lawsuit without the insurer’s prior written consent. Paying off a disputed lien or settling a lawsuit before the insurer agrees can leave that amount outside the policy.
Subrogation (Condition 13)
After paying a claim, the insurer steps into the insured’s rights against anyone responsible, such as a seller liable on deed covenants or a forger, up to the amount it paid. On request, the insured must sign documents transferring those rights, and the insurer may sue or settle in the insured’s name. If the payment did not cover the whole loss, the insurer defers its rights until the insured has fully recovered. Subrogation also reaches the insured’s rights under any indemnity, guaranty, warranty, other insurance policy or bond.
Arbitration (Condition 19)
In the owner’s form printed in the TIRSA Rate Manual, the arbitration condition appears in brackets, and Condition 18 of that form covers class actions. As printed, if the Amount of Insurance is $2,000,000 or less, either the Company or the Insured may submit a claim or dispute to binding arbitration; above $2,000,000, arbitration requires both to agree. Arbitration runs under the ALTA Title Insurance Arbitration Rules, which incorporate the American Arbitration Association’s Consumer or Commercial Rules as appropriate. Fees are allocated under those rules, and a court with jurisdiction may enter judgment on the award.
The TIRSA Rate Manual (Seventh Revision) also lists a TIRSA Waiver of Arbitration Endorsement for owner’s and loan policies. The current form (03/08/2024) deletes the arbitration condition: Condition 19 of the owner’s policy, Condition 18 of the loan policy, or Condition 12 of the Owner’s Extended Protection Policy. Check the endorsement pages attached to your policy to see whether it applies.
Without arbitration, a coverage dispute is decided in court. Condition 16 provides that the law of the state where the land is located governs, which for New York property means New York law, and that suits against the insurer go to a state or federal court with jurisdiction.
Documents to gather
- The owner’s policy, with schedules and endorsements.
- The title report and closing statement.
- The deed, contract of sale and any survey.
- The document that raised the problem: summons, recorded instrument, lien notice or rejection of title.
- Correspondence with the other party.
- Invoices, payoff letters and other proof of money spent.
- Appraisal or market evidence, if a loss in value is claimed.
Recorded documents for Manhattan, Brooklyn, Queens and the Bronx are on ACRIS; Staten Island and Westchester County records are held by their county clerks (how to read ACRIS).
The New York regulator’s role
DFS licenses title insurers and agents and supervises how insurers handle claims. Whether a particular claim is covered is resolved under the policy itself: by agreement, by arbitration under Condition 19, or in court (Conditions 16 and 19).
Claim settlement standards. Insurance Law § 2601 bars any “insurer doing business in this state” from unfair claim settlement practices. The section makes no exception for title insurers. These include knowingly misrepresenting facts or policy provisions, failing to acknowledge claim communications with reasonable promptness, lacking reasonable standards for prompt investigation, and not attempting in good faith to settle claims fairly where liability is reasonably clear. Section 2601 also requires an insurer to advise the claimant of acceptance or denial within thirty working days after receiving a properly executed proof of loss. A violation is established only when the conduct is committed without just cause and occurs often enough to indicate a general business practice, and DFS enforces it through monetary penalties (§ 2601(c)).
Complaints. A policyholder can file a complaint through the DFS online complaint portal or call the DFS hotline at (800) 342-3736, weekdays 8:30 a.m. to 4:30 p.m. (DFS contact page). DFS may share the complaint with the company. The policy number, claim number, a timeline and copies of correspondence let DFS follow the file.
Official sources
- 2021 ALTA Owner’s Policy form (Conditions 1, 3 to 10, 12, 13, 16 to 18)
- NY Insurance Law § 2601, unfair claim settlement practices
- NYS DFS, Title Insurance consumer page
- NYS DFS, directory of licensed title insurers
- NYS DFS, title insurance agent licensing
- NYS DFS, file a complaint
- TIRSA Rate Manual, Seventh Revision, effective October 1, 2024 (Part VI forms list)
- TIRSA Waiver of Arbitration Endorsement, 7.2015 form (Stewart Virtual Underwriter)