by LAWPRO

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The key reason for prompt reporting of a claim is to keep options open to look for ways to resolve the claim, and not have our position prejudiced by delay or actions taken by the policyholder before the claims examiner has had a chance to complete their investigation.

This is especially important in claims that might involve litigation. We have had claims reported to us months or even a year after a dispute between our policyholder and a neighbour that resulted in one party suing the other (e.g. over access to the property or an encroachment). Legal fees start to add up and only then is a claim reported, with the policyholder hoping to be reimbursed for fees to date as well as having TitlePLUS fund the ongoing litigation.

By not reporting the claim when the problem was first discovered our ability to do a full investigation of the matter has been hampered, and fees incurred prior to reporting the claim may not be reimbursed. With prompt reporting we can a) try to find a resolution that could avoid litigation and b) if litigation is required, we can immediately seek the assistance of external counsel who often work with LAWPRO and TitlePLUS.

Late reporting of claims can also hinder the process with situations involving previous work done on the property without a building permit, resulting in an order from the municipality to bring the property into compliance. Examples of this kind of work include replacing a deck or finishing a basement or even building an entire addition. TitlePLUS has experienced adjusters we can retain to visit a property and assess what is needed to satisfy an order in the most cost-effective way. We can also gather information on the defective work for later use in recovering our costs under our subrogated rights.

If the policyholder goes ahead with repairs or renovations before we can investigate with our adjusters and contractors, the coverage may be reduced to the extent that the costs to resolve the claim are higher than may have been necessary and our ability to recover our costs later has been prejudiced.

Late reporting of a claim is often not intentional. The homeowner may have simply forgotten they had a TitlePLUS policy or that it applies to their situation. And a lawyer retained on a dispute may not be the lawyer who originally purchased the policy and so may not be familiar with title insurance and the need to report a claim.

When discussing the TitlePLUS policy with your purchasing clients, we encourage you to emphasize the importance of prompt reporting to ensure your clients can enjoy the fullest coverage possible on their claims