Given these prerequisites, and the absence of any further vitiating factors, the terms of the insurance policy are free to be negotiated by the parties to it. While the insurer may demonstrate more expertise in these matters than a policyholder, the procuring of the services of a legal representative will safeguard the interests of the insured against the insurer.

As is sometime the case, a contract maybe held to void for uncertainty and therefore specific reference needs to be made for as many of the terms of the insurance contract as possible.
Particularly in regard to uncertainty, there are implied terms of law that will be incorporated by a court of law should any dispute of the terms of the policy arise.

These most often have to do with the fact that the law will not tolerate parties contracting out of the constitutional right of due process or the rule of law.

So, in many title insurance policies, the incidence of statutory intervention which affects the title to land will be excluded from title insurance coverage under the policy.

Another common exception are defects to a title that are the result of an order of the court, an example of which is the curial interpretation and determination of bankruptcy proceedings concerning a previous owner of the property.

For example, in the case of taxation liens, they will attach to the property and in the event of the bankruptcy may find the subsequent owner being laden with the resulting debt owing.

Differences between Insurers

Between the competitors of the title insurance market, the various procedures may resemble one another but the individual insurer’s policies may differ markedly according to the aversion they hold for a particular type of risk.

For example, the duty of defense of title is largely a uniform industry practice, however where one insurer may stipulate this in its standard policy as a maximum amount of legal costs it is prepared to incur in defending title, another insurer may make the same available only as extended cover which inherently attracts a premium cost.

These observations provide the necessary impetus for any prospective purchaser of a title insurance policy to investigate alternative policies as it is their statutory right to retain the insurer of their choice, and to compare the features of the various title insurance products available.

In defense of the title insurer, when coverage is initiated, a title report will be provided and then the choice of precise extended coverage made available. It is at this time that the prospective owner needs to be astute and aware of alternatives and implement a risk management strategy to address the areas where they find themselves most vulnerable.

Given the ample opportunity to resolve these matters, and also the much needed professional advice available, it appears that it is only through want of care that a policy holder will find themselves underinsured.

Resources:

http://www.duhaime.org/LegalDictionary/C/Consensus.aspx
http://www.milnernixonlaw.com/PracticeAreas/Property-Defense.asp

http://lenderama.com/2007/12/refining-defense-of-title-insurance/