Ensure That You've Insured the Right Property


Deference Must Be Given To The Insureds’

Reasonable Expectations

A recent case held that the insureds were covered for the loss of a second parcel that was not included in the grant deed’s and title policy’s legal (metes and bounds) description of the property because the preliminary report referenced the second parcel by its assessor’s parcel number.

The principle that an insureds’ reasonable expectations are ultimately what govern the scope of coverage that is afforded by an insurance policy has perhaps never been better illustrated than by the recent decision handed down by the First District Court of Appeal in Lee v. Fidelity National Title Insurance Co., (1st Distr., Sept. 16, 2010) 188 Cal. App. 4th 583.

As with any other type of insurance, the language of a title insurance policy is to be construed in accordance with its plain, ordinary and popular meaning. However, in determining what benefits or duties the insurer owes its insured(s) pursuant to the policy, the court may not look to the words of the policy alone, but must also take into account what the insureds’ reasonable expectations are as to the scope of coverage the policy affords. So, what should title insurers and their agents take away from the Lee v. Fidelity decision?

Read the full article to see what happened in Lee and to understand what steps title insurers should take to avoid similar situations.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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