STG Coinsurance (Underinsured) Endorsement Guideline 5
Explanation:There are several types of coinsurance:
(1) Coinsurance with other title insurers if a portion of liability is assumed by each insurer. In this case there are two types of coinsurance clauses: a coinsurance clause where each insurer is liable only for a pro rata part of liability; and a coinsurance clause where there is joint and several liability for the first million dollars (or other stated amount).
(2) Coinsurance with the insured on an Owner's Policy if the 1992 Policy is issued for less than 80% of the value of the land. Sometimes insureds are concerned that the insurer will later assert that the Policy was not issued for full value. To avoid this possibility the insureds may request an endorsement acknowledging the inapplicability of the coinsurance clause.
(3) Coinsurance with the insured if the interest is underinsured.
Underwriting Requirements:(1) We can issue either kind of coinsurance clause with other title insurers unless, prohibited by law of regulation. A Senior Underwriter must approve any coinsurance clause that provides joint and several liability.
(2) If we are fully satisfied as to the value of the land or sales price, we can issue an endorsement to the 1992 ALTA Owner's Policy acknowledging that the coinsurance clause will not apply.
(3) A Coinsurance Endorsement may be issued with the Owner's or Loan Policy if the Policy is issued for less than the sales price or loan amount.
The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.
Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.
This guideline applies to the following form(s):