Your title insurance helps protect you from the loss of your home and the investments that you have made in the property. In theory, you can count on your title insurance company to help you fight a title claim and also to reimburse you if you lose the property because of a successful title claim.
Working with an attorney that you trust is crucial when undertaking such an important legal endeavor as protecting the ownership of your home. Could the title company that underwrote your policy refuse to pay for the lawyer you want to hire?
Is the defect covered under the policy?
The first question you have to ask regarding a title claim is whether the situation entitles you to coverage. If you purchased a standard title policy and face an ownership challenge based on a claim not backed up by public records, the title company may not protect you. Such claims often only have coverage if someone purchased an extended policy.
What if you do have coverage that applies in this situation? Can the title insurance company still refuse to cover the costs for the lawyer you pick?
The policyholder usually has the right to choose
Your exact rights depend on the language used in your policy. Some insurance companies will require that you use their counsel, but those terms are not that common. You typically will have the right to select your own lawyer to help you in the matter, provided that attorney meets certain standards set by the insurance company.
Knowing your rights during a title dispute can help you push back against insurance company misconduct that complicates an already stressful situation.