3.24 Coinsurance


Coinsurance With Other Title Insurance Companies

Coinsurance among title insurance companies means the act of two or more title insurance companies issuing separate title insurance policies insuring the same insured and to the same interest in land. Each policy specifies the dollar amount of liability assumed and the specific circumstances under which it arises. The aggregate sum of the amounts of insurance under each of the policies is the total coverage afforded to the insured.

Note: Any request for coinsurance must be referred to the National Legal Department before a commitment is issued.


Coinsurance With Insured

Section 7(b) of the Conditions and Stipulations of the 1987 and 1990 ALTA owner's policy reintroduces the provision of the 1962 owner's policy which contained a coinsurance clause. The intention of this clause is to require an insured, if inadequate insurance is purchased, to become a coinsurer. Coinsurance has been commonly provided in almost all forms of insurance and is generally recognized as an appropriate element in risk spreading which is the most fundamental concept of insurance. An owner would become a coinsurer if the property is insured for less than 80% of its value, the full consideration, or if the property is improved to the extent of 20% of the value over the amount insured.