Title insurance is a relatively new but increasingly important product in the Georgian real estate market. It protects the owner or lender (bank) from financial loss caused by defects in the title that were unknown before the property purchase. This service involves managing claims related to title insurance policies and obtaining insurance compensation. If it turns out that a third party (e.g., an heir of the previous owner) claims the property you purchased, or a registered lien is discovered, title insurance should cover the loss. However, insurance companies often try to deny coverage by citing complex policy terms. Legal assistance is essential to prove that an insured event has occurred and to receive the compensation due.
What does this service cover?
The title insurance claims service covers:
- Insurance Policy Analysis: Detailed study of the contract to determine specifically which risks are insured (e.g., forgery of documents, unknown heirs, incorrect boundary definition) and what exclusions exist.
- Preparation of Insurance Claim: Collecting all necessary documentation and evidence confirming the title defect and the amount of loss.
- Negotiation with the Insurance Company: Protecting interests when dealing with the insurer to avoid baseless denial of the claim.
- Litigation: If the insurance company refuses compensation, preparing a lawsuit and representing the client in court.
- Rectification of Title Defect: working in parallel to eliminate the legal flaw in the property (e.g., settling with a third party using insurance funds).
Common Real-World Scenarios
Title insurance claims arise in the following scenarios:
- Forged Documents: It turns out that the seller's power of attorney used to sell you the property was fake. The real owner demands the return of the property. The policy should cover the property's value.
- Hidden Mortgage or Lien: Due to a technical error in the Public Registry, an old mortgage was not visible at the time of purchase but "surfaced" later.
- Boundary Disputes: A neighbor claims that part of your house stands on their land. If the policy covers survey errors, the insurer must compensate for the loss or legal costs.
- Inheritance Disputes: A legal heir of the deceased seller appears, whose existence was unknown at the time of the transaction.
Georgian Legal Framework
Title insurance is regulated by the Insurance chapter of the Civil Code of Georgia and the Law on Insurance. The legislation obliges the insurer to pay compensation within the timeframe established by the contract upon the occurrence of an insured event. Also important are the Civil Code norms regarding bona fide purchasers (Articles 183 and 312), which define when an owner can be deprived of property. Regulations of the Insurance State Supervision Service of Georgia regarding consumer protection are often used in insurance disputes.
Process: How does a specialist work?
When an owner receives information about a title problem, a lawyer should be involved immediately. The first step is written notification to the insurance company within the established deadlines (which is critical!). Then, the lawyer collects evidence: court summons, registry documents, expert opinions. The specialist drafts a substantiated claim and sends it to the insurer. In case of refusal, the lawyer prepares a lawsuit and demands compensation not only for the loss but, in some cases, for lost income (if the policy covers it).
Why Legal.ge?
Disputes with insurance companies require specific knowledge. On Legal.ge, you will find lawyers with experience in both real estate and insurance law. They will help ensure that your title insurance remains more than just a piece of paper and that you actually receive compensation when your property rights are threatened. Protect your investment with the help of professionals.
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