A title insurance claim starts with a written notice to the insurance company named on your policy. After that, the policy’s conditions, its rulebook, control what happens. The insurer looks into it and may ask for a signed proof of loss. If the problem is covered, it defends you or sues to protect your title, then either fixes the problem or pays your loss.
These rules apply statewide, in New York City, Westchester County and elsewhere in New York. Since October 1, 2024, New York has used the 2021 owner’s and loan policies written by the American Land Title Association (ALTA), issued with New York endorsements under the TIRSA rate manual. References such as “Condition 3” point to the matching part of the 2021 ALTA Owner’s Policy. Your own policy and its endorsements govern your claim.
For what the policy covers, see title insurance policy explained. For how specific problems play out, see title insurance claim examples.
Before you file: find your policy and the insurer
Your policy is issued by a licensed title insurance company, usually through a title agent. The agent ran the search and handled the closing. The insurer carries the risk and handles claims.
The final policy arrives after closing, often to your attorney, and usually sits in your closing file. Here is where to look:
- The jacket (the cover pages) names the insurer and contains the covered risks, exclusions and conditions.
- Schedule A gives the policy number, date, amount and who is insured.
- Schedule B lists the exceptions, the matters the policy does not cover (see title search and title report).
- Endorsements attached to the policy can change coverage or the conditions.
Your notice must go to the address stated in the policy (Condition 17). If the policy is missing, the title agent or closing attorney can find the insurer and policy number in 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 protects the lender, which makes its own claims (see owner’s vs lender’s title insurance).
The steps at a glance
| Step | Condition | Who acts |
|---|---|---|
| Notice of claim | 3, 17 | You |
| Investigation and cooperation | 6 | Both |
| Proof of loss, if requested | 4 | You |
| Defense or lawsuit | 5 | Insurer |
| Fix, settle or pay | 7, 9 | Insurer |
| Measuring the loss | 8 | Insurer |
| Payment | 12 | Insurer |
| Recovering from others | 13 | Insurer |
| Arbitration | 19 | Either side (up to $2M) |
Step 1: Tell the insurer promptly, in writing (Condition 3)
You must notify the insurer “promptly in writing” once you actually know of a lawsuit or other problem the policy may cover. The same applies if someone rejects your title, such as a buyer or lender who refuses to close. “Know” means what you actually know or were told, not what you could have found in the public records (Condition 1).
The policy sets no fixed number of days. Late notice does not cancel coverage by itself. But if the delay hurts the insurer, what it owes is reduced “to the extent of the prejudice.” For example, a court may have entered a default judgment before the insurer could defend.
A notice letter usually gives:
- the policy number and the insured’s name
- the property address
- what happened and when you found out
- copies of the papers that raised the problem
- a request for defense, if you have been sued
If you have been sued, the deadline to answer the lawsuit keeps running while the insurer reviews the claim.
Step 2: Investigation and cooperation (Condition 6)
The insurer checks whether the problem is a covered risk, whether an exclusion or Schedule B exception applies, and when the problem arose. It then takes a position: it accepts the claim, denies it, or accepts it while reserving its rights on specific issues.
You must give “all reasonable aid” in gathering evidence, finding witnesses, and in any lawsuit or settlement. The insurer may require a sworn interview, called an examination under oath, and records such as books, ledgers and checks. If a failure to cooperate hurts the insurer, or you refuse the interview or records, coverage for that claim can end, unless the law forbids it.
Step 3: Proof of loss (Condition 4)
The insurer may require a signed proof of loss before it pays. It describes the problem and, as far as possible, how the loss is calculated. The 2021 form sets no deadline for it, but the insurer can hold payment until it arrives.
Step 4: Defense and lawsuits (Condition 5)
Defending you. If you ask in writing, the insurer defends you “at its own cost and without unreasonable delay” against a lawsuit over a covered problem. It chooses the lawyer, but you can object for a good reason. It does not pay for a lawyer you hire separately, or for defending claims the policy doesn’t cover.
Suing on your behalf. The insurer may also bring its own lawsuit, at its cost, to establish your title or reduce your loss. In New York that might be a suit to cancel a forged deed, or a quiet title action, which asks a court to confirm who owns the property (see deed theft in NYC). Suing is not an admission that the claim is covered. The insurer must act diligently, and it alone decides whether to appeal a loss.
Step 5: How the insurer resolves the claim (Conditions 7 and 9)
| Option | What it means | Effect |
|---|---|---|
| Fix | Removes the defect, lien or problem | Insurer has done its job |
| Pay policy limit | Pays the full policy amount | All obligations end |
| Settle with others | Pays the other side | Obligations on that loss end |
| Settle with you | Pays your loss | Obligations on that loss end |
Fixing it. If the insurer removes the problem in a reasonable way, by lawsuit or otherwise, it has “fully” done its job (Condition 9.a). If it gets a lien paid off or a forged deed cancelled, the fix is your remedy. You are not also paid for the time the problem existed. While the insurer is in court, it owes nothing for the loss until a final ruling against your title that can’t be appealed (Condition 9.b).
Paying the policy amount (Condition 7.a). Paying the full amount, plus approved costs so far, ends the insurer’s obligations, including any duty to keep defending you.
Settling (Condition 7.b). The insurer can settle with the other side in your name, such as paying off a lienholder, or pay your loss directly. Either ends its obligations for that loss.
Step 6: How the loss is measured (Condition 8)
The policy pays your actual money loss. It is not a report or legal opinion on the title, and claims under it are based on the contract, not on carelessness by the searcher.
The insurer pays the lower of:
- the policy amount in Schedule A, as adjusted, or
- the drop in your property’s value caused by the problem.
Value is generally measured on the date you discovered the problem. Two exceptions:
- If the whole title was void on the policy date because of a covered problem, you can choose, in writing, to measure value as of the policy date.
- If the insurer sues to establish your title and fails, the policy amount goes up by 15%. You can then choose to measure value at the end of that lawsuit, or on the date the insurer received your notice.
Defense costs and approved expenses are paid on top of the loss (Condition 8.e).
Example (hypothetical). An owner insured for $800,000 finds that a recorded right of way, missed in the search, crosses the side yard. An appraiser values the house at $1,000,000 without the right of way and $940,000 with it. The loss is $60,000, well under the policy amount. If the insurer instead gets a recorded release of the right of way, that fix satisfies the policy and no payment is owed.
The optional TIRSA market value endorsement changes this math. With it, coverage may reach current value above the original policy amount; see what is title insurance.
Step 7: Payment and what it does to your coverage (Conditions 10 and 12)
Once the insurer’s liability and your loss are settled under the conditions, it pays within 30 days (Condition 12). Payments other than costs and lawyers’ fees reduce your policy amount dollar for dollar (Condition 10). A partial payment leaves less coverage for a later claim.
Settling on your own (Condition 9.c)
The insurer does not owe for anything you “voluntarily” agree to pay in settling a claim or lawsuit without its written consent first. If you pay off a disputed lien or settle a lawsuit before the insurer agrees, that amount can fall outside the policy.
The insurer’s right to recover from others (Condition 13)
After paying, the insurer takes over your rights against anyone responsible, up to what it paid. That could be a seller who made promises about the title in the deed, or a forger. This is called subrogation.
- If asked, you must sign papers transferring those rights.
- The insurer may sue or settle in your name.
- If the payment didn’t cover your whole loss, the insurer waits until you have fully recovered.
- It also takes over your rights under any indemnity, guarantee, warranty, other insurance policy or bond.
Arbitration (Condition 19)
Arbitration is a private, binding decision instead of a court case. In the owner’s form printed in the TIRSA rate manual, it works like this:
- If the policy amount is $2,000,000 or less, either you or the insurer can send a claim or dispute to binding arbitration.
- Above $2,000,000, both sides must agree.
- It runs under ALTA’s arbitration rules, which use the American Arbitration Association’s consumer or commercial rules as appropriate. Who pays the fees is set by those rules, and a court can turn the award into a judgment.
Some policies remove arbitration. The TIRSA manual lists a Waiver of Arbitration Endorsement for owner’s and loan policies; the current form is dated 03/08/2024 and deletes the arbitration condition. Check the endorsement pages attached to your policy.
Without arbitration, a coverage dispute goes to court. The law of the state where the property is located governs, which for New York property means New York law. Suits against the insurer go to a state or federal court with jurisdiction (Condition 16).
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: a summons, recorded document, lien notice or rejection of title
- Letters and emails with the other side
- Invoices, payoff letters and other proof of money spent
- An appraisal or market evidence, if you claim a loss in value
Recorded documents for Manhattan, Brooklyn, Queens and the Bronx are on ACRIS, the city’s online land records system. Staten Island and Westchester County records are held by their county clerks (how to read ACRIS).
What the state regulator does
DFS licenses title insurers and agents and oversees how insurers handle claims. Whether your claim is covered is decided under the policy itself: by agreement, by arbitration (Condition 19) or in court (Condition 16).
Fair claim handling. New York’s unfair claim settlement law applies to any insurer doing business in the state, and makes no exception for title insurers. Practices it bars include:
- knowingly misstating facts or policy terms
- not acknowledging claim letters reasonably promptly
- having no reasonable standards for prompt investigation
- not trying in good faith to settle fairly when liability is reasonably clear
The same law requires an insurer to accept or deny a claim within thirty working days after receiving a properly signed proof of loss. A violation counts only if it happens without good reason and often enough to be a general business practice. DFS enforces it with fines.
Complaints. You can file 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 your complaint with the company. Your policy number, claim number, a timeline and copies of letters help DFS follow the file.
Details for attorneys and title professionals
Arbitration numbering. In the TIRSA-printed owner’s form, the arbitration condition (Condition 19) appears in brackets, and Condition 18 covers class actions. The Waiver of Arbitration Endorsement deletes Condition 19 of the owner’s policy, Condition 18 of the loan policy, or Condition 12 of the Owner’s Extended Protection Policy.
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 (thirty working days; penalties under § 2601(c))
- NYS DFS, Title Insurance consumer page
- NYS DFS, directory of licensed title insurers
- NYS DFS, title insurance agent licensing
- NYS DFS, file a complaint
- NYS DFS, contact page and hotline
- TIRSA Rate Manual, Seventh Revision, effective October 1, 2024 (Part VI forms list)
- TIRSA Waiver of Arbitration Endorsement, 7.2015 form (Stewart Virtual Underwriter)