How Are Commercial Title Insurance Claims Settled?

05/18/2026 10:41 AM Mark Goodman

Title insurance is one of the most common topics that we discuss on our blog, and this is the case for a few different reasons. For starters, we help set clients up with title insurance policies quite regularly, so not only are we familiar with them, we also know just how valuable they can be. Nobody hopes to cash in on an insurance policy, but if you need to fall back on it, a policy is essential to have.

But how exactly does a title insurance policy protect your home and your investment? Below, we explain the two main ways that a title insurance policy will protect you in the event of a claim.

How Title Insurance Claims Are Settled

As the name implies, a title insurance policy protects you against claims made against your property’s title. Perhaps a long lost heir comes back and files an objection against what they believe is an invalid sale, or maybe the government comes after you because a previous owner failed to pay their property taxes. An owner’s title insurance policy keeps you protected so that you don’t have to worry about having to settle these claims out of your own pocket. Here’s how claims are typically resolved.

Legal Defense - A title insurance policy effectively means you’re paying for legal support in the event you should ever need it. If a claim is made against your title, your policy ensures that a legal defense will be provided. You can just sit back knowing that a team of lawyers is working hard to defend your property against the claim. If you don’t have title insurance, you’d have to pay for legal services out of your pocket.
Settlement Costs - Title insurance also protects you in the event of a valid claim. If someone does in fact have a legal right to the property you thought you acquired legally, or there truly are valid property taxes associated with the property from a previous owner, you could end up losing the property or have to pay a fortune out of pocket to settle the claim if you don’t have title insurance. When you secure a policy, you’re also paying for the knowledge that the insurance company is now on the hook to settle any valid claims on your title.

Title insurance will work to settle your claim with no cost legal services or they’ll settle the claim out of their own pocket. Not bad for a policy that can be secured with a one-time fee after you’ve closed on the property! For more information about title insurance policies for your commercial properties, pick up the phone and call the team at Commercial Partners today at (612) 337-2470.