Quick answer

Title insurance coverage typically “kicks in” when a covered title problem that existed before or at the policy date threatens your ownership or mortgage interest and you provide prompt notice to the title insurer. A title company will investigate, and if the defect falls within your policy, the insurer will either defend your title (litigation) or pay resulting losses up to the policy limit. (See guidance from the Consumer Financial Protection Bureau and the American Land Title Association.)

Background and why timing matters

Title insurance dates to the late 19th century in the U.S. as title issues multiplied with land transfers and mortgage lending. Unlike most insurances that protect against future events, title insurance protects against defects, liens, or claims that existed prior to the policy effective date — so coverage is retroactive to the policy date. That retroactivity is why the timing of discovery and notification matters: insurers need a clear connection between the covered defect and the period the policy protects.

In my practice advising homeowners and real-estate investors, I’ve seen two common timing problems: (1) policyholders delay reporting a problem because they hope it will “go away,” and (2) buyers assume the lender’s title policy protects them personally. Both can jeopardize a claim. Reporting early preserves evidence and strengthens your position.

How the Title Insurance Claims Process works — step by step

  1. Discover or receive notice of a claim or defect
  • You might receive a notice of lien, a lawsuit, a tax bill, or a neighbor’s boundary claim. Sometimes title defects surface during refinancing, probate, or sale.
  1. Review your policy and exceptions
  • Pull your owner’s (or lender’s) title insurance policy and read the coverage section and exceptions. Common exceptions include recorded easements, zoning, and certain survey matters.
  1. Notify the title insurer promptly
  • Most policies have a prompt-notice or cooperation clause. Contact the issuing title company or your title agent and provide written notice describing the problem and attaching copies of any notices, lawsuits, or documents. Keep timelines — note the date you first learned of the issue.
  1. Insurer investigation and response
  • The insurer will open a file, search public records, and decide whether the defect is covered. They typically have two options when coverage applies: defend your title in court, or negotiate/settle and pay losses up to the policy limit.
  1. Resolution: defense, settlement, or payment
  • If the insurer defends, they will hire counsel. If the claim is valid, the company may pay to remove the defect (paying off a lien, quieting title) or compensate you for covered loss.
  1. Follow-up and documentation
  • Keep copies of all communications, invoices, and court documents. Some losses (legal fees, settlement amounts) may be reimbursable under the policy.

What “kicks in” — owner vs. lender policies

  • Owner’s (buyer’s) policy: Protects you against covered title defects up to the face amount of the policy for as long as you or your heirs have an insurable interest in the property (many owner policies are described as “perpetual” for the owner). However, you must follow policy notice and cooperation provisions. Use your owner’s policy even though a lender’s policy likely exists.
  • Lender’s policy: Protects the mortgage lender’s interest up to the outstanding loan balance; it does not protect you as the homeowner. The lender’s insurer will typically defend the lender’s lien, not your ownership. (CFPB explains the difference and the separate purposes of owner and lender policies: https://www.consumerfinance.gov/owning-a-home/title-insurance/)

Common types of covered claims

  • Undisclosed liens (e.g., former-owner unpaid taxes or contractor liens)
  • Forged or unauthorized signatures on deeds
  • Errors in public records (recording mistakes)
  • Mistaken identity or false impersonation
  • Validity of wills or missing heirs claiming an interest
  • Legal defects that predate your policy effective date

Many of these are specifically mentioned in model owner policies and discussed by the industry (American Land Title Association — ALTA: https://www.alta.org/).

Typical exclusions and conditions that affect whether coverage applies

  • Known defects: Problems you knew about and accepted at closing are usually excluded.
  • Matters specifically listed as exceptions on your policy (recorded easements, taxes shown in the public records, survey exceptions).
  • Zoning, building code compliance, and environmental hazards — often excluded unless you purchased an extended form policy that adds specific coverages.
  • Post-policy events caused by the insured, such as liens you created after purchase.

Understanding exceptions written on Schedule B of your policy is vital. If an issue is listed as an exception, the insurer generally will not cover it.

Real-world examples (illustrative)

  • Undisclosed tax lien: A client discovered a tax lien from a prior owner and notified the title company. The insurer investigated, found the lien predated the policy, and paid legal costs to clear the lien and protect the client’s title.
  • Forged deed: Another client faced a challenge from a party alleging a forged signature on a past deed. The title insurer defended the claim in court and settled in the homeowner’s favor.

These cases illustrate the difference between coverage that retroactively protects you and problems that fall outside your policy.

Practical checklist for filing a claim

  • Locate your title insurance policy and the title commitment or abstract from closing.
  • Gather all related notices, lien statements, court papers, and correspondence.
  • Write a clear notice to the title insurer with dates and copies of documents; keep records of delivery.
  • Ask the insurer for the claim file number and the contact person handling your claim.
  • Secure independent legal advice if the insurer declines coverage or if substantial equity is at stake.
  • If dissatisfied, you may file a complaint with your state insurance regulator or seek alternative dispute resolution.

How long do you have to file? Practical timelines

There is no single federal deadline: many owner policies remain in force as long as you own the property, but insurance-style policy conditions (prompt notice, cooperation) require you to act quickly after discovery. State statutes of limitations and doctrines like laches (delay) can limit remedies for quiet title actions or claims against third parties. If you discover a problem, notify the insurer immediately — waiting months or years can jeopardize evidence and legal options.

Disputes: denied claims and next steps

  • Ask for a written denial explaining the basis.
  • Review Schedule B exceptions and policy language; compare denial to policy terms.
  • Consider hiring a real-estate attorney experienced with title insurance. In many states, disputes may go to arbitration (if your policy requires it) or state court.
  • If you suspect improper insurer conduct, contact your state department of insurance and, for consumer-oriented background on title insurance and shopping tips, see the CFPB (https://www.consumerfinance.gov/owning-a-home/title-insurance/).

Professional tips and best practices

  • Buy an owner’s policy: The buyer should obtain an owner’s title policy — the lender’s policy does not protect you.
  • Read Schedule B and the exceptions carefully at closing; negotiate removal of exceptions when feasible.
  • Keep your closing package, policy, and title commitment in a safe place, and digitize copies.
  • Report issues promptly and document every interaction with the title company.
  • When in doubt, consult a real-estate attorney. If the claim involves complex liens or litigation, professional representation preserves options.

Common mistakes to avoid

  • Relying on the lender’s policy as protection for your equity.
  • Waiting too long to report a discovered issue.
  • Discarding closing paperwork or failing to secure the original policy.

Interlinked resources on FinHelp

Frequently asked questions

  • “Does title insurance cover future zoning changes?” Usually not; standard policies exclude zoning and land-use restrictions unless a specific endorsement was purchased.
  • “If the title company denies my claim, can I still sue?” Possibly — you can contest the denial; check your policy’s dispute resolution clause and consult counsel.
  • “Will a lender’s title policy cover my loss if I lose the house?” No — the lender’s policy protects the lender’s lien amount, not your equity or ownership rights.

Professional disclaimer

This article is educational and not legal advice. Title insurance and claims involve complicated, state-specific law and contract language. In my practice, I advise clients to consult a licensed title agent or experienced real-estate attorney when a claim or dispute arises.

Authoritative sources and recommended reading

If you want, I can review a redacted copy of your policy language (Schedule B and conditions) and outline potential coverage triggers and likely hurdles for a claim.