§14.2 - Nature and Purpose of Title Insurance

• Jurisdiction: Washington

§14.2 NATURE AND PURPOSE OF TITLE INSURANCE

Unlike traditional forms of insurance, which insure against loss due to future "casualty" events (such as accident or death), title insurance insures against risks that might have occurred prior to the date of the policy. Whereas casualty insurance requires recurring premium payments and is limited by a set term, title insurance requires a one-time premium and is in force for as long as the insured has potential for loss under the policy provisions.

A policy of title insurance is a contract of indemnity whereby the insurer agrees to compensate or reimburse the insured for loss or damage that may occur under the policy's terms, provisions, and limits. It indemnifies an insured owner or lender who suffers a policy-covered loss. A statutory definition of title insurance is contained in RCW 48.11.100: "'Title insurance' is insurance of owners of property or others having an interest in real property, against loss by encumbrance, or defective titles, or adverse claim to title, and associated services."

In addition, a title insurance policy is defined in RCW 48.29.010(3)(a): "'Title policy' means any written instrument, contract, or guarantee by means of which title insurance liability is assumed."

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